Deficit v Surplus

 

As was reported last week, the Government borrowed £74 billion in the year to March, £1.8 billion more than George Osborne's borrowing target.

 

Don’t get me wrong, £1.8 billion is a lot of money (for dramatic effect it is…….£1,800,000,000) and £74 billion is a colossal figure (at risk of being boring……£74,000,000,000), but it is not all bad news. Firstly, £1.8 billion represents being just 2.5% over target. Secondly, the annual borrowing figure of £74 billion was £17.7 billion less than the previous year.

 

George Osborne has pledged to return the UK to a budget surplus by 2020 and I guess, he is broadly on track. But turning the current deficit into a surplus requires a £74 billion swing in just 4 years, which seems a huge ask when there are so many variables. Just look at how the banking collapse caught so many by surprise and the resultant recession it brought. Now factor in an impending EU referendum, the constant threat of war / terrorist attacks, volatile commodity prices, changes in Government the world over and it appears an even bigger ask to turn the deficit around.

 

I guess all George Osborne can do is to ‘control the controllables’……the next few years borrowing compared to the target will confirm just how in control he is.

 

Time will tell!