LONDON, Oct. 19 (Xinhua) -- Despite the political and economic uncertainties of Brexit, the British government borrowing continued to fall although total debt is still rising, according to data released on Friday.
Figures from the official data body the Office of National Statistics (ONS) showed total British government borrowing in September of 4.1 billion pounds (about 5.36 billion U.S. dollars), about one billion pounds below the level at the same period last year.
As a result, cumulative net borrowing in the first half of the financial year that began in April this year was close to 20 billion pounds, nearly a third less than the same period in the 2017/18 financial year.
The improvement in public finances is mainly due to higher central government revenue, in particular sales tax and income tax receipts, which have been bolstered by robust growth retail sales and employment since spring.
There was a 6.2 percent year-on-year increase in income tax and capital gains receipts, as job figures continued to grow and incomes matched or were only just below inflation.
Sales tax receipts reflected the lack of concern over Brexit among consumers to record a 4.5 percent year-on-year rise.
However, in the Brexit-sensitive area of business and manufacturing, corporation tax receipts fell by 0.2 percent.
The government's deficit on its spending plans now looks set to undershoot the official statistics monitoring body the Office of Budget Responsibility (OBR) forecast from March which showed a 3 billion pound improvement in net borrowing this year to 37 billion pounds.
Chancellor of the Exchequer Philip Hammond will reveal his autumn budget at the end of the month and the decline in government borrowing will give him more room to operate.
Samuel Tomb, chief UK economist at Pantheon Macroeconomics, a financial data analysis firm in London, said that the improving public finances will allow Hammond to carry out plans for higher spending on the public health service (NHS) without raising other taxes or cutting spending in other departments more aggressively over the next couple of years.
"Borrowing will be 25.9 billion pounds, about 1.2 percent of GDP, this year, if the year-over-year trend in borrowing in the first six months of this fiscal year is maintained, a hefty 11.1 billion pounds less than expected in the Spring Statement," said Tombs.
"Borrowing is on track to be below the government's 2020/21 cyclically-adjusted limit of 2 percent two years early, implying that the Chancellor has no need to stick to his Spring Statement plans which envisaged more fiscal tightening in 2019/20 and 2020/21." (1 pound = 1.31 U.S. dollars)
