Forex cash provides cheer for George Osborne

BANK fines for rigging the foreign exchange markets helped boost the public coffers last month as Chancellor George Osborne battles to meet annual deficit targets.

Chancellor of Exchequer George Osborne. Picture: JP

Public sector borrowing – excluding the effect of bank bailouts – was £14.1 billion in November, better than expected and £1.6bn lower than in the same month last year.

Treasury coffers were swollen by £1.1bn in penalties from banks fined by the Financial Conduct Authority, figures from the Office for National Statistics (ONS) yesterday showed.

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It meant borrowing for the April-November period representing the financial year-to-date was £75.8bn, about £500 million lower than for the same period last year.

This is the first time in 2014-15 that the year-to-date shape of the public finances has been better than the same period a year before. The Office for Budget Responsibility (OBR) is forecasting a 6 per cent fall in the annual deficit for the year to March.

This was revised down earlier this month from a tougher target of 11 per cent after disappointing income tax receipts. The latest figures deliver a boost to the Chancellor.

Victoria Clarke, an economist at Investec bank, said the numbers were moving in Osborne’s favour and he should at least manage to keep the deficit falling this year, or even meet his revised targets, which have looked out of reach. “Just months ahead of the… election, this would be a major plus,” she said.