The focus today will be on the UK public sector debt figures for July due this morning. The public finances have not gone to plan so far in this fiscal year with the level of debt being higher every month compared to the previous year. July is a key month for corporation tax receipts so a sizeable reduction in debt is expected.
However Britain's government finances showed an unexpected deficit in July traditionally a month for strong tax receipts -- after a shortfall in corporation tax, especially from the energy sector .The Office for National Statistics said the public sector finances excluding financial sector interventions the government's preferred measure showed a deficit of 557 million pounds, compared to a 2.8 billion pound surplus in July 2011. The data demonstrated a fall of 0.8 percent receipt on the year and spending grew 5.1 percent.
The government had originally planned to eliminate the structural budget deficit by 2015 with a tough programme of spending cuts and tax rises. But the weak economy has forced it to extend the planned fiscal consolidation by another two years and Prime Minister David Cameron has warned austerity could last until 2020.
GBP still rallying stronger againust dollar . GBP USD trading at the range of 1.5750-1.5770.
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Posted in Daily Market News on May 30 2014