UK Government Borrowing and Tax Revenues Analysis for 2023-24 by KPMG Senior Economist

Tuesday, 23 April 2024, 06:45

UK government borrows £120.7 billion in 2023-24, benefiting from increased corporation tax receipts and elevated pay growth. The surge in revenues provides limited scope for pre-election tax cuts. The FTSE 100 is poised to reach a record high, reflecting market expectations and fiscal projections.

https://store.livarava.com/23c04273-013e-11ef-a6bf-63e1980711b2.jpg — UK Government Borrowing and Tax Revenues Analysis for 2023-24 by KPMG Senior Economist

UK Borrows £120bn in 2023-24

Rapid economic analysis by Michal Stelmach, senior economist at KPMG UK, reveals that the UK government recorded a deficit of £120.7 billion in the 2023-24 financial year. This marks a 5.9% reduction from the prior year, driven by increased corporation tax revenues and elevated pay growth.

Impact on Tax Cuts

The significant rise in corporation tax receipts, reaching £102.8 billion and reflecting a 19% increase, limits the potential for substantial pre-election tax cuts. The National Insurance cut has also impacted income tax revenues positively.

Market Expectations and Fiscal Headroom

Market interest rate adjustments and the unforeseen budget deficit suggest that the UK government may have minimal fiscal 'headroom' for tax reductions, posing challenges for future fiscal planning.

This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.