–Says Better Record On Spending This Year May Reflect Timings
–Outlook For Receipts Will Depend On Devels In Wider Economy

LONDON (MNI) – UK corporate tax receipts in October were lower than
the Office for Budget Responsibility expected, the OBR said in a
statement following the October public finance data.

Public sector net borrowing (PSNB) was stg6.5 billion in October
2011, around stg1.2 billion lower than in October 2010 and close to
market expectations of stg6.5 billion.

The OBR said that government spending had been lower than expected
so far this year but warned that this may reflect different timings for
payments and that this could unwind as the 2011-12 FY goes on.

Receipts would depend on developments in the wider economy, the
OBR said.

While October tends to be an important month for corporation tax
receipts – these “came in lower than last year and lower than we would
have expected on the basis of our March forecast”.

Weakness in receipts from the oil and finance sectors were to blame
the OBR said.

PSNB for the first seven months of 2011-12 was stg10.4 billion
lower than in the equivalent period last year. But to meet its forecast
for government borrowing for the 2011-12 FY, the OBR noted that
borrowing would have to be stg4.9 billion lower than last year in the
final five months of 2011-12.

While central government spending had grown less strongly than the
OBR expected so far this year, the office noted that this probably
reflected “different timing of payments”.

“These effects may unwind over the rest of the year, which is a
period when departments usually increase their spending. The outlook for
government receipts over the rest of the year is very dependent on
developments in the wider economy”.

The comments come ahead of the Nov 29 Autumn Statement from
Chancellor of the Exchequer George Osborne, which will be accompanied by
new economic and fiscal forecasts from the OBR. The recent deterioration
in the growth outlook is expected to put the government’s ambitious
fiscal targets in doubt.

–London newsroom: 4420 7862 7491 email: drobinson@marketnews.com

[TOPICS: MABDS$,M$B$$$,MT$$$$]