Some encouraging economic news for the Coalition this morning with the monthly public borrowing numbers for July coming in much better than expected on the back of a jump in tax receipts. My view has long been that the problem with the public finances has been as much about the amounts of money coming in as the amounts going out. Yes, spending got out of control under Labour but the onset of the recession had a particularly severe impact on tax receipts, notably Corporation Tax, as companies retrenched.
The rebound in tax receipts shows business is coming out of the worst of the slump and suggests that George Osborne’s ambition of bringing borrowing and debt under control in the lifetime of the Coalition is far from unrealistic.
Retail sales also advanced nicely in July while discount retailer Poundland is expecting to create 2,000 new jobs. Now, none of this means there won’t be tough times ahead and the full impact of public spending cuts is likely to be a drag on the economy in 2011 but I’m more convinced than ever (and City AM’s Allister Heath has argued this for a while) that we will NOT see a double-dip recession in the UK.
All in all, good news for Nick Clegg and the Government.