UK June public borrowing slightly higher than forecast

LONDON (Reuters) - Britain's public finances showed a slightly bigger than expected deficit in June, according to official data on Friday, but underlying borrowing for the first three months of the tax year showed the government on track to meet its budget goal.

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KEY FIGURES FOR UK PUBLIC BORROWING (IN BLN STG)

JUNE F'CAST

PSNB-ex 8.470 8.0

PSNB 10.234 9.45

PSNCR 3.097 n/a

(For previous stories click on)

KEY POINTS

- May 2013 PSNB-ex revised up by 2.235 bln stg, largely due to more cautious treatment of expected revenue from Swiss tax deal

- 2012/13 PSNB excluding Royal Mail, Bank of England asset transfers and financial sector interventions revised down by 2.3 bln stg to 116.454 bln stg, equivalent to 7.4 pct of GDP, lowest since 2008/09

ECONOMISTS' REACTION

MELANIE BOWLER, MOODY'S ANALYTICS

"Today's results make no difference to the longer-term outlook for UK public finances. The fact that fiscal consolidation is here to stay for at least another three years is actually a risk to the outlook for the UK economy.

"In terms of the recovery that we're seeing at the minute, it could be potentially knocked off track given that the government is so committed to continuing with fiscal austerity. Household spending is still down on pre-recession levels and is struggling to recover.

"The welfare benefit changes which are being introduced this year could weigh particularly on lower-income households."

ALAN CLARKE, SCOTIABANK

"At the margins, they are broadly in line with expectations, maybe fractionally worse given the revisions to previous months but they are still on track to hit the government's target. Given the better news on growth that we are we are seeing there is potentially some better news for public finances but it will take a little while to feed through into the data."

(Reporting by William Schomberg and Mark Anderson)

Source: http://news.yahoo.com/uk-june-public-borrowing-slightly-higher-forecast-084622845.html

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