UNITED KINGDOM (OBSERVATORY) – The UK budget deficit for the fiscal year that ended in March fell to the lowest level since 2001/2002 of the fiscal year at 2.1% of gross domestic product from 17.3% last year, Reuters reports.
Borrowings of the public sector of Britain fell to a minimum for 16 years during the recently completed fiscal year, which could increase pressure on Finance Minister Philip Hammond to avoid austerity.
In monetary terms, borrowing fell by 8% compared with a year earlier to 42.6 billion pounds. The budgetary regulator predicted a figure of 45.2 billion pounds last month.
Hammond made public finance a priority, although he took a slower approach than previous Minister of Finance George Osborne, who inherited a deficit equivalent to just under 10% of GDP in 2010.
Hammond made more progress than expected to improve public finances, because that the economy of the UK has slowed not so much as feared after the referendum in 2016.
However, Hammond still faces a tough choice, after promising to end the real years shortened wage payments for many public sector workers, while he was also threatened with an appeal to spend more on health and other social services.
Hammond says he wants to get rid of the deficit altogether in the mid-2020s, but realizing the fatigue of many voters after a ten-year spending cut, he suggested that he could announce spending growth in his budget document in November.