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Last Updated: Monday, 21 May 2007, 10:55 GMT 11:55 UK
UK finances mean boost for Brown
Chancellor Gordon Brown
The Chancellor is hoping to stick to his "golden rule"
The UK's public finances improved in April, providing some good news for Chancellor Gordon Brown before he takes over as Prime Minister.

Public sector net borrowing was 1.1bn, against 2.8bn in April 2006, said the Office for National Statistics (ONS).

As a result, the current budget now has a surplus of 200m, compared with a deficit of 900m in April last year.

An 10.6% rise in value added tax (VAT) receipts to 8.5bn, was the driving force behind the improvement.

The latest VAT figures were the second highest recorded by the ONS since records began in 1973.

However, the ONS also added that the latest figures also recorded an improvement on April last year as the 2006 figures were affected by a write-off of Nigerian debt.

April's surplus will raise hopes that the Chancellor will meet his "golden rule" of balancing the budget, excluding investment, over the current economic cycle.

However, analysts warned it was too early to say for sure whether Gordon Brown would meet his targets.

"It's far too early to be drawing definitive conclusions this early in the financial year, but it's a good start: net borrowing is lower than in April last year, the current budget position is better, receipts growth is very buoyant and spending is subdued," said Investec economist Philip Shaw.

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