According to the Office for National Statistics, the UK budget deficit in the just-concluded fiscal year has dropped to the lowest level in the past 11 years. At the end of the year, it amounted to 42.6 billion pounds ($ 59.3 billion). We recall that last year the deficit was 46.2 billion pounds.
Borrowing fell to 2.1% from gross domestic product (GDP) last year, compared with 10% in 2010. However, the total government debt as a percentage of GDP rose to 86.3%, compared with 85.3% a year earlier. In monetary terms, the debt is 1.798 trillion pounds sterling.
ONS stressed that the figures are the first preliminary estimates of the last financial year and they will be revised in September 2018 as more data become available.
The current budget, which measures current public spending but not investment, showed a small surplus of 0.1 billion pounds in 2017/18. This is the first such surplus since 2001/02. According to the Office of National Statistics, only in March the total budget deficit was 1.3 billion pounds, which is almost 37% less than in the same month last year. The indicator of borrowing does not include the amount spent on supporting state banks.
UK Finance Minister Philip Hammond has made more progress than expected on improving public finances. This is evidenced by the fact that that the economy of the island state slowed down less than expected after the Brexit referendum in 2016.
Mr. Hammond retained the goal of George Osborne, the previous Chancellor, to reduce the gap between costs and loans, reducing the rate of decline. The news was regarded by many financial analysts as a signal to a gradual abandonment of the austerity policy, for which Prime Minister Theresa May is often criticized.
It is expected that by 2023 the volume of annual borrowings of Great Britain will be about 21 billion pounds, whereas earlier the country expected to achieve a deficit-free budget by the middle of the next decade.
Officials in London pleased investors with good news that will inevitably affect the behavior of the national currency. We should expect strengthening of the British pound and a slight increase in the shares of national companies.
The material was prepared with the participation of Katya Gordon,
a leading analyst of the brokerage company CT Trade