UK budget deficit lowest in 14 years

In January, Britain’s budget surplus was 3.3 billion, which is the smallest for 14 years.

Britain’s public sector net cash requirement had a much bigger than expected surplus last month, following a revision due to a statistical reclassification that meant the figure was lowered by around 20 billion pounds, according to official figures released today.

Public finances are still in dire straights as the net public sector debt stands at a record 47.8 percent of Gross Domestic Product and that this figure could increased by another trillion pounds as UK banks have been brought into the public sector.

The current economic downturn is now having a major affect on UK public finance figures having hit the fiscal position and if the situation continues at the current rate, then borrowing will be near 100 billion pounds this year, which is 20 billion pounds more than Mr Darling had forecast.

The recession is having an impact on a number of different levels as revenues from both business profits and personal incomes usually floods in January. Tax income is down by 11 percent and corporation tax is down 24 percent.

With unemployment closing in at 7 percent of the population, there has been a 15 percent increase in social benefit spending.

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