U.K. Borrowing Declines in Year Through September

Government borrowing in Britain declined in the first six months of the financial year compared with the same period a year earlier, buoyed by strong tax receipts.

The Office for National Statistics said Friday the public sector borrowed GBP32.5 billion ($42.83 billion) in the six months through September to plug the gap between spending and taxes, compared with GBP35 billion in the first half of the previous financial year, which runs through to the end of March.

The figures suggest Treasury chief Philip Hammond is broadly on track to meet forecasts for borrowing of GBP58.3 billion for the financial year as a whole.

The outlook for Britain's public finances has worsened in recent months, however, as weakening consumer spending and uncertainty over the country's future ties to the European Union weigh on growth.

The Office for Budget Responsibility, which produces the U.K.'s official borrowing forecasts, also said this month that it expects to revise down its estimates for future productivity growth, which will likely push up government borrowing.

Mr. Hammond is due to present his latest tax and spending plans to Parliament on Nov. 22. The Chancellor of the Exchequer has come under pressure from some in his own party to ease a yearslong squeeze on public spending after Prime Minister Theresa May lost her parliamentary majority in a June election.

The ONS said Friday that borrowing in the month of September was GBP5.9 billion, considerably less than the GBP6.6 billion expected by economists polled by The Wall Street Journal.

The treasury enjoyed strong inflows of value-added tax, a sales tax, as well as taxes on real-estate purchases, which helped offset a rise in debt-interest payments linked to higher inflation, data showed.

Write to Jason Douglas at Jason.Douglas@wsj.com and Wiktor Szary at Wiktor.Szary@wsj.com

(END) Dow Jones Newswires

October 20, 2017 04:51 ET (08:51 GMT)