Public finance numbers could be back on track - London Report

THE LATEST public finance figures, due out on Wednesday, are expected to have seen renewed year-on-year improvement in September after a particularly disappointing August.

An improved September performance would help get the public finances back on track to reach George Osborne’s targets after taking a hit the previous month.

Economists expect public sector net borrowing (PSNB) excluding banks to have narrowed to £9.8bn in September from £11bn in August 2014.

It is also estimated that the total PSNB narrowed to £9bn in September 2015 from £10.2bn in September 2014.

The public finances suffered in August from a dip in income tax receipts after these had shown marked improvement through the first seven months of 2015.

Howard Archer at IHS Global Insights said: “While chancellor George Osborne was no doubt disappointed by the August borrowing figures, he will likely have taken them in his stride. The public finances can be highly volatile from month to month and monthly figures can also be subject to significant revisions.

“Much can depend on the actual timing of payments being received as well as government expenditure and it is notable that the increase in central government expenditure was particularly marked in August.”

Meanwhile, retail sales data for September, due out on Thursday, is expected to show that retail sales volumes rose by 0.6 per cent month-on-month in September. September’s retail sales performance will benefit from the fact that sales on the bank holiday Monday of 31 August will be included in the data.

Economists said prospects for retail sales and consumer spending in the final quarter are pretty good.

“The fourth quarter is of vital importance to retailers, and it will be interesting to see how aggressive they are in their discounting this year in the run-up to Christmas,” said Archer. “In particular, will UK retailers match or even surpass the substantial discounting that took place on Black Friday at the end of November last year?”

On the corporate calendar, tomorrow sees results from Whitbread and Asos. Home Retail Group and Sky will report on Wednesday, while Thursday sees numbers from Ladbrokes and Travis Perkins. Shire and William Hill will update the market on Friday.