U.K. Sees First July Budget Surplus Since 2002 on Tax Boost
Britain posted its first July budget surplus in 15 years last month as payments of self-assessed income tax poured in. Revenue exceeded spending by 184 million pounds ($240 million) compared with a deficit of 308 million pounds a year earlier, the Office for National Statistics said on Tuesday. The median forecast in a Bloomberg survey was for a deficit of 1 billion pounds. It left the shortfall in the first four months of the fiscal year at 22.8 billion pounds, up 9 percent on the year. July is a good month for the public finances, with the Treasury receiving higher-than-normal receipts of income tax. Self-assessed receipts jumped 11 percent from a year earlier and there was also a boost from value-added tax revenue, which rose 5 percent. But spending remains under pressure from higher inflation making interest payments on index-linked government bonds more expensive. Debt costs in the fiscal year to date rose by 23 percent, the biggest increase for the period since 2010. Spending is also being boosted by timing issues relating to payments to the European Union, which have risen by more than half in the year to date.
Home Prices in U.S. Rose 6.6% in the Second Quarter, FHFA Says
Home prices in the U.S. increased 6.6 percent in the second quarter from a year earlier as buyers competed for a shrinking supply of listings. Prices rose 1.6 percent on a seasonally adjusted basis from the previous three months, the Federal Housing Finance Agency said in a statement Tuesday. In June, prices climbed 0.1 percent from May, less than the 0.5 percent average estimate of 12 economists. The U.S. has been starved for inventory, in part because builders slowed production after the last decade’s property crash and many seniors are choosing to remain in their houses rather than downsize. The supply of previously owned homes on the market at the end of June fell 7.1 percent from a year earlier, the 25th consecutive annual decline, according to the National Association of Realtors.
With Some Countries, China Is in the Red
China’s big trade surpluses hog all the headlines, but imbalances go both ways. South Korea’s $72.2 billion surplus with the People’s Republic in fact tops a list of more than 40 nations that export more to the country than they import from it, followed by Switzerland and Australia, data compiled by Bloomberg show. Besides commodity exporters such as Iran and machinery producers like Germany, smaller economies such as Ireland, Finland and Laos round out the tally. Imports by the world’s biggest exporter show how its humming factories prop up other economies – and for some of those, what’s on the line should they find themselves involved with territorial disputes or geopolitical tensions with one of their biggest customers. The data itself can be skewed as a result of those tensions. The IMF and World Bank omit data from Taiwan. If included, the island would outrank all other economies except South Korea with a China surplus (including Hong Kong) of $67 billion in 2016. In Asia, South Korea and Malaysia are among the more vulnerable to China’s economic arm-twisting, while Japan and Vietnam look relatively immune, according to Bloomberg Intelligence estimates based on their trade surpluses with China as a share of total output.