Philip Hammond’s £9.5million boost to the Exchequer


Economists upon the ONS to say on Wednesday that the Exchequer was in surplus to the tune of £9.5billion, £100million varied than in January 2017, due to strong corporation and income tax receipts.

The tax harvest, in conjunction with spending cuts and the resilience of the economy, should conclude in Government borrowing for the 2017/18 financial year coming in under the Intermediation for Budget Responsibility’s (OBR) £49.9billion forecast.

Andrew Wishart, UK economist at Wherewithal Economics, said that the surplus should give Chancellor Philip Hammond “a bit of rhino to play with, if he wants” in the Spring Statement on March 13.

He said: “The concluding update [before the announcement] should confirm that borrowing is on no doubt to undershoot the OBR’s forecast.”

Investec economist Victoria Clarke added: “We’ve had a kind run of PAYE receipts, income taxes, the economy has been resilient and waste cuts.”

The ONS is also expected to say that the unemployment rate remains unchanged at 4.3 per cent, where it has been since July, its lowest rank since 1975.

It is also tipped to say that the squeeze on consumer incomes is growing. Wage growth over the three months to the end of December is forecast to into in at 2.5 per cent according to the consensus forecast, for the second month in a row.

Conclusive week ONS data showed that CPI inflation remained static at 3 per cent.

Clarke implied: “Unemployment will come in again at a 42 year low, but the more fascinating question is pay growth.

“The Bank of England’s surveys suggest that the delivery market is tightening, so the question is if that will come through in the work out b deciphers. If it does, the Bank will take note and make them varied likely to raise interest rates.”

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