To earn more than you have spent is surplus and that is exactly the condition of the UK Public Finance which has recorded the biggest surplus for four years.
Inspite the inflation, unemployment which is increasing at high rates, this news of Surplus Funds was really a breather for the government. According to the Office for National Statistics (ONS) this has been possible, simply because of the fall in the government borrowings and a fair rise in the corporate tax receipts. Generally the finances tend to be surplus in the month of January because of the rise in the tax receipts. If we go by figures then to be precise the government has borrowed £93.5bn in the tax year till date as compared to £109.14bn in 2010/11.
The chief economist at Markit Mr Chris Williamson, also has interesting facts to give. According to him this keeps the government very much on track to meet its borrowing need or may maximum go up to £127bn for this year as compared to £136bn which was the government borrowing for 2010-11. And there is still two more months to go which makes the target even more achievable.
Surplus Does Not change UK Economy.
Normally such situations are really favorable conditions for growing economy but not in UK. Inspite of the fact that the borrowing rates are good and improving, it does little to change the shaky ground UK is in right now.
With other factors like the growing unemployment, inflation and volatile market the official data confirms a dip in the economy. According to Bank of England the UK economy is going zigzag in and out of growth. Whether the economy will be really favourable we will have to wait for the months to come. The surplus will definitely not increase the burden of borrowing funds but might just compensate the costs of the economic failure with respect to growth and increase in unemployment.
With almost a month pending to declare the upcoming annual budget by the Chancellor, George Osborne, chief economist at the British Chambers of Commerce, David Kern, said the January borrowing figures gave him scope to help the economy grow and by doing so this give some room for flexibility in his upcoming Budget to implement measures to support growth and help companies create jobs, invest and export,” he said.
Let’s hope for the best.