BBC: Government borrowing fall raises scope for more spending

Government finances have continued to improve, potentially giving more scope for the Chancellor, Philip Hammond, to raise spending in the Budget.

The government borrowed 7.8bn pounds in April-the lowest figure for April since 2008, according to official figures.

The Office for National Statistics also revised the borrowing figures for last year to 40.5bn pounds, down from its previous estimate of 42bn pounds.

The deficit was 2% of GDP last year, the lowest rate since 2002.

When George Osborne took over as Chancellor in 2010, borrowing stood at 9.9% of GDP.

Several years of austerity helped cut that figure and a policy of restricted spending has continued under his successor Philip Hammond.

「The public finances were boosted in April by strong income tax receipts, which was helped by the strong rise in employment over the early months of 2018,」noted Howard Archer, chief economic adviser to the EY Item Club.

How much money the Chancellor will have to play with will depend on how the economy performs this year.

The year got off to a disappointing start when bad weather restricted growth to just 0.1% in the first quarter.

However, Bank of England governor Mark Carney has reiterated his view that the slowdown in temporary.

"Our view is not that circumstances changed in the first quarter. Its more likely to have been temporary and idiosyncratic factors that slowed the economy," he told MPs on Tuesday.

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