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Budget watchdog sees rise in borrowing for rest of 2016/17 tax year
December 21, 2016 / 1:13 PM / in a year

Budget watchdog sees rise in borrowing for rest of 2016/17 tax year

LONDON (Reuters) - British public borrowing in the remaining four months of the financial year is likely to be slightly higher than over the same period a year earlier, the government’s budget watchdog said on Wednesday.

Official borrowing figures for the first eight months of the financial year, released earlier on Wednesday, showed public borrowing had so far fallen by more than needed to meet finance minister Philip Hammond’s 2016/17 deficit reduction target.

But the Office for Budget Responsibility said the outlook for the rest of the year looked less rosy.

“Considerable uncertainty remains over prospects for borrowing in the remaining third of the year, but we expect public sector net borrowing to rise slightly relative to the same period in 2015-16,” the OBR said.

Recent strength in corporation tax revenue was unlikely to continue, while stamp duty tax revenue last year was boosted by a one-off rush in transactions to avoid a tax increase, the OBR said. Spending was likely to rise due to greater public investment and higher servicing costs for inflation-linked government bonds, the OBR added.

Reporting by David Milliken, editing by Andy Bruce

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