The U.K. budget deficit narrowed in November, yet a considerable improvement is required to meet the government's fiscal target for 2014/15.
Public sector net borrowing excluding interventions declined by GBP 1.6 billion from last year to GBP 14.1 billion in November, the Office for National Statistics reported Friday. Economists had forecast the shortfall to total GBP 15.1 billion.
During April to November, public sector net borrowing excluding public sector banks decreased GBP 0.5 billion to GBP 75.8 billion.
Income tax related payments increased by 4.1 percent in November. Due to the slowdown in the housing market, stamp duties rose by a less-than-expected 5 percent.
In the Autumn Statement, Chancellor George Osborne estimated borrowing to fall to GBP 91.3 billion in 2014/15 from about GBP 97.3 billion in 2013/14. Osborne is set to deliver the final budget of this parliament on March 18.
Osborne has suffered a disappointing fiscal year 2014/15 so far with the shortfall up slightly from 2013/14, IHS Global Insight's Chief UK Economist Howard Archer said.
To achieve a PSNB of GBP 91.3 billion in 2014/15 would require appreciable overall improvement over the final four months of fiscal year 2014/15, he said.
At the end of 2014, public sector net debt excluding public sector banks totaled GBP 1.45 trillion, which was equivalent to 79.5 percent of gross domestic product.
The latest public finance figures showed that the trend in borrowing has finally begun to improve but the pace at which the deficit is falling remains disappointingly slow given the strength of the economic recovery, Samuel Tombs, a senior UK economist at Capital Economics, said.
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