Britain posts first deficit for January since records began

Britain has reported his first budget deficit for January since records began. That’s due to increasing government spending and diminishing tax receipts.

According to the Office National Statistics the expenditure of the Government has exceeded its income by £4.3bn.

It is the first time the Government needs to borrow in January since records began in 1993.
Andrew Goodwin, senior advisor to Ernst & Young Item Club said that January usually has a healthy surplus, because in January there are always the receipts of the corporation tax. Even in the moment of financial crisis, it’s surprising to see that the Government became in a situation of deficit.

The ONS said the Government has spent £4.4bn more than in January 2009, while receipts were down £4.2bn.

David Kern, chief economist at British Chambers of Commerce, said that these bad figures reinforce the need for credible and specific deficit-cutting measures in next months.

Now, it’s very important that the Government announce a stop in the public sector wage bill, and an immediate review into the cost of public sector pensions. So the markets and the rating agencies will be persuaded that the Government is trying to resolve this big problem.

I also find it surprising that Britain has reported his first deficit in January since the records began in 1993. I think there has to change a lot to get the financial situation healthy again.