Public sector borrowing came in at £6.8bn in August, £2.4bn higher than a year earlier. However, over the first five months of the fiscal year, borrowing was still £7.8bn lower than the same period of 2017-18.
There will be one, possibly two, more releases before the Office for Budget Responsibility finalises its forecasts for the Budget. Although borrowing continues to run well below 2017-18 levels, the fact that revenue growth is only running in line with its previous forecast and the likely temporary nature of the undershoot in spending means that major changes to the OBR’s projections are looking increasingly unlikely.
This means the Chancellor may need to use revenue raising measures, or tolerate higher borrowing, in order to fund the extra spending planned for the NHS.
Borrowing was higher than expected in August, marking the end of a run of strong figures. Despite the rise in borrowing in August, it is still on track to come in below the Office for Budget Responsibility’s (OBR’s) forecast over the fiscal year as a whole.
We remain content with our forecast for borrowing be £34bn in 2018/19, below the £37bn forecast by the OBR. And we think that the fiscal watchdog is likely to revise its forecast down in November, giving the chancellor room to deliver the promised increase in health expenditure without having to increase taxes or make cuts elsewhere.
UK's budget deficit rises more than expected
Figures published by the Office for National Statistics showed borrowing was £6.8bn over the month, £2.4bn more than August 2017 and double the £3.4bn forecast by City economists. Not great news for the chancellor, Philip Hammond, who will be thinking about spending options ahead of his autumn budget.
The broader picture is better however, with borrowing in the first five months of the fiscal year totalling £17.8bn, £7.8bn less than in the same period in 2017 and the lowest in 16 years.
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Hannah Maundrell, editor in chief of money.co.uk, says:
Frustrating times for Natwest customers this morning, especially ahead of the weekend. Banks really need to pull their socks up because this keeps happening again and again. It’s really not good enough when so many customers are being encouraged to bank online.
It’s worrying when your bank can’t keep on top of their IT systems – customers shouldn’t panic though – Natwest customers can still use telephone banking and they are trying to fix the issues, but if you’re worried about any of your payments being affected speak to Natwest ASAP.
Pound falls on renewed Brexit concerns
Sterling is down 0.3% against the dollar at $1.3222, and down 0.3% against the euro at €1.1225.
Here’s the latest on Brexit negotiations.
Shares in Just Eat are down 5.8%, making it the second biggest faller on the FTSE 100 (after Smiths Group).
European markets open higher
- FTSE 100: +0.8% at 7,424
- Germany’s DAX: +0.7% at 12,407
- France’s CAC: +0.3% at 5,469
- Italy’s FTSE MIB: +0.7% at 21,531
- Spain’s IBEX: +0.3% at 9,616
- Europe’s STOXX 600: +0.3% at 384
NatWest customers locked out of online accounts
The bank says this morning that it is “working hard” to fix the issues after customers complained.
On Thursday, millions of Barclays customers were unable to access their accounts online for several hours after the high street lender to suffered a technical glitch.
And last but not least, TSB is still recovering from a botched IT upgrade in April that left up to 1.9 million digital customers locked out of accounts.
Uber in talks to buy Deliveroo, Bloomberg reports
The news agency writes:
A bid for London-based Deliveroo, last valued at more than $2 billion, would mark a major attempt by Uber to dominate the food-delivery business in Europe. An acquisition price is unknown. Any offer would need to be considerably above its latest valuation, according to people with direct knowledge of Deliveroo plans.
The talks could fall apart, in part because Deliveroo and its investors have been reluctant to relinquish independence, said the people, who asked not to be identified because the information is private. Spokesmen at Deliveroo and Uber declined to comment.
Uber Chief Executive Officer Dara Khosrowshahi has made the company’s food-delivery business a top priority ahead of a planned initial public offering in the second half of 2019.
Markets shrug off trade war fears; Uber in talks to buy Deliveroo
Asian markets have followed Wall Street higher today, as investor fears over a full-blown trade war between China and the US subsided.
Japan’s Nikkei rose 0.6% to hit an eight-month high, while the Hang Seng in Hong Kong was up 1.3%.
It followed a record high close for both the Dow Jones and the S&P 500 on Thursday, as investors focus on positive company earnings and concerns ease over trade tensions.
David Madden, market analyst at CMC Markets explains:
Markets in Europe are also expected to open higher:The Dow Jones and S&P 500 hit all-time highs yesterday as fears surrounding the US-China trade standoff subsided. The tariffs that were announced by both sides during the week were deemed to be not as harsh as originally suspected.
The US in particular showed restraint, but that was partially so the Trump administration would have more ammunition should they feel it is required down the line. Now that the latest series of tariffs are out of the way, investors fell back into their bullish routine. Stock markets in Asia overnight were dragged higher by the positive move on Wall Street.