False dawn for spending: Revenues are surging, but Rishi can’t afford to start dishing out the goodies, says ALEX BRUMMER


The government’s borrowing requirement is the difference between two very large numbers. Treasury taxes and Whitehall spends.

As the economy comes back to life, revenues are rising and the government collected 62.2 billion pounds of receipts in June, up from 9.5 billion pounds in the same month last year.

Income and corporation tax revenue jumped, and VAT receipts were up 22 percent from a year ago as consumers went shopping.

Chancellor Rishi Sunak is looking for ways to save money. Triple lock for state pensions may be in jeopardy after foreign aid cuts

Central government spending was £2.5 billion higher than in June. But it fell £24.1 billion in the first quarter and remained £5.5 billion below the Office for Budget Responsibility (OBR) forecast.

The combination of a stronger-than-expected economy, and shrinking Covid and other spending suggests that OBR may be too cautious in its March budget estimates.

There may be a case for revising its medium-term growth forecast in the autumn.

Correction can be flattering to deceive. The national debt grew to 99.7 percent of the economy’s total output in June and the cost of repayment of that debt is rising.

Rishi Sunak can’t pocket the windfall and start scooping out the goodies.

Conversely, the chancellor is looking at ways to save money. Triple lock for state pension may be in jeopardy after foreign relief cuts.

There remains the potential for a 1 per cent increase in national insurance to fund the backlog in the NHS and cover social care costs.

The fly in the ointment is the cost of borrowing. A rise in the retail price index has raised the bill for servicing inflation-linked bonds.

The Bank of England’s bond-buying program helped the government expand the fiscal envelope in the pandemic.

Fund raising in the COVID era has reduced the maturity of debt, so invoices are coming in more quickly.

Currency printing has made debt stocks more sensitive to even small changes in market interest rates.

OBR states that in June alone, loan interest bills climbed to £8.7 billion, the highest monthly payment on record until 1998.

The then Chancellor of Labor, Gordon Brown (before the financial crisis hit), claimed that by bringing the budget closer to balance, he was saving taxpayers billions of pounds in interest charges.

One fears that the changed profile of the public debt means Sunak has little chance of repeating the move.

Many lobbyists, such as welfare groups seeking to make the temporary £20 increase in Universal Credit permanent, could be knocked back on their hands.

bridge construction

After setbacks for Deliveroo in London and Soho House-Owner Membership Collective Group in New York, a bright welcome for Bridgepoint on the London Stock Exchange will come as a relief.

The letter is critical to private equity firms that load companies with debt and slash and burn behind closed doors.

It would be nice to think that Bridgepoint is different, preferring to grow and invest in the business rather than defend it.

It takes work on a different level to titans like Blackstone, KKR and Fortress and hopes that Float – which has placed a £3.6 billion value on the William Jackson-founded company – will provide greater openness.

Still, one might not think that Etsu missed an opportunity to tap into a new community of retail investors by failing to reach customers directly in Burger King UK and elsewhere.

The initial public offering is a plus for London, and if it encourages other private equity groups to jump into a nascent investment sector where public disclosure is key, all the better.

The deal gives Jackson and his allies a chance to realize some cash and open up a neat war chest.

It will be interesting to see if the good guys match the rhetorical works.

the setting sun

Pity the 60 Japanese firms that piled up £2.4 billion in the haunting Tokyo Olympics. Toyota has pulled its local ads.

Among other supporters is booze giant Asahi, but stadium bars will remain empty and pubs will remain under curfew at 8 p.m.

As far as sportswear brand Asics is concerned, the sponsorship is unlikely to give away any gold, hoping to challenge Nike and Adidas.

A sports miracle may be needed to address the cases of COVID in the athletes’ village and discontent among the public and at the Nikkei.

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