U.K. Posts First July Budget Surplus for Three Years

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Britain recorded its first July budget surplus since 2012 as income tax and revenue from property purchases hit records for the month.

Revenue exceeded spending by 1.3 billion pounds ($2 billion) compared with a deficit of 100 million pounds a year earlier, the Office for National Statistics said on Friday in London. Economists in a Bloomberg survey had forecast a 1.1 billion-pound surplus. Government income rose 3.9 percent and spending climbed 3.4 percent.

The public finances get a boost in July as quarterly taxes on corporate profits pour in along with payments from oil companies and self-employed workers. In the first four months of the fiscal year, the deficit narrowed by 23 percent to 24 billion pounds, leaving Chancellor of the Exchequer George Osborne on track to meet his full-year forecast of 69.5 billion pounds.

The pound rose after the data were published, and traded at $1.5721 at 9:31 a.m. London time, up 0.2 percent from Thursday.

Revenue rose across the board last month, with the take from income taxes gaining 5.3 percent from a year earlier and stamp-duty revenue increasing 1.7 percent. The levels of each were the highest for the month since records began in 1997. Corporation tax on profits rose 5.2 percent to 6.9 billion pounds, the best July since 2013.

The revenue figures include 400 million pounds of gilt-coupon income transferred from the Bank of England’s Asset Purchase Facility. That compares with 500 million pounds in the same month last year.

The measure used to calculate how much the Treasury needs to borrow in the financial markets showed a surplus of 202 million pounds. The figure includes 1.3 billion pounds from the sale of government shares in Lloyds Banking Group Plc. Net debt fell to 1.51 trillion pounds, or 80.8 percent of gross domestic product.

Osborne has vowed to wipe out a deficit of almost 5 percent of gross domestic product within the current five-year parliamentary term and run surpluses during “normal” times thereafter. Britain last had a surplus in the 2000-2001 fiscal year.

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