"A tax windfall from Swiss banks has helped the UK post a bigger improvement in its public finances than expected, giving a boost to George Osborne ahead of his spending review next week.
But analysts warned that the shrinking deficit was largely down to one-off factors rather than longer-term changes. There was a deficit of £8.8bn in May, almost half the £15.6bn a year earlier, on the government's preferred measure for public borrowing, which excludes some of the effects of bank bailouts. The May figure was also well below the £12.6bn forecast by economists in a Reuters poll.
Publishing the figures, the Office for National Statistics said the deficit had been cut by two temporary factors: there was a reduction of £3.9bn thanks to receipts from the Bank of England's quantitative easing bond purchases and of £3.2bn due to be received from retrospective tax payments by Swiss banks.
That windfall follows a deal with Switzerland in January on the tax of Britons with undeclared Swiss bank accounts. Under the agreement, banking deposits of UK residents held in Swiss banks will become liable for taxation."
Windfall tax on Swiss bank accounts helps reduce government borrowing | Business | guardian.co.uk
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So, what do we have here:
1) May 2013 deficit is £8.8bn
2) Year ago in May 2012 deficit was £15.6bn - difference of £6.8 bln
How the reduction was achieved?
1) £3.9 bln "funny money" from BoE
2) £3.2 bln one off event
Total - £7.1 bln, which in effect means that real deficit gone up by £0.3 bln
No wonder Jeffrey is looking very smug -
![](http://static.guim.co.uk/sys-images/Guardian/About/General/2013/6/21/1371817158999/George-Osborne-010.jpg)
But analysts warned that the shrinking deficit was largely down to one-off factors rather than longer-term changes. There was a deficit of £8.8bn in May, almost half the £15.6bn a year earlier, on the government's preferred measure for public borrowing, which excludes some of the effects of bank bailouts. The May figure was also well below the £12.6bn forecast by economists in a Reuters poll.
Publishing the figures, the Office for National Statistics said the deficit had been cut by two temporary factors: there was a reduction of £3.9bn thanks to receipts from the Bank of England's quantitative easing bond purchases and of £3.2bn due to be received from retrospective tax payments by Swiss banks.
That windfall follows a deal with Switzerland in January on the tax of Britons with undeclared Swiss bank accounts. Under the agreement, banking deposits of UK residents held in Swiss banks will become liable for taxation."
Windfall tax on Swiss bank accounts helps reduce government borrowing | Business | guardian.co.uk
---
So, what do we have here:
1) May 2013 deficit is £8.8bn
2) Year ago in May 2012 deficit was £15.6bn - difference of £6.8 bln
How the reduction was achieved?
1) £3.9 bln "funny money" from BoE
2) £3.2 bln one off event
Total - £7.1 bln, which in effect means that real deficit gone up by £0.3 bln
No wonder Jeffrey is looking very smug -
![](http://static.guim.co.uk/sys-images/Guardian/About/General/2013/6/21/1371817158999/George-Osborne-010.jpg)
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