We’ve hit the National Borrowing Target!

News has filtered through and been hailed by economists this week that the UK government has managed to reach its annual borrowing cut target. What benefits could this bring to those who are looking to sell their business in the current economic climate?

National borrowing rates directly affect businesses. This is because, the more the country borrows, the more prices, taxes etc. go up. This effects a company’s bottom line and weakens their position when trying to persuade a potential buyers of the benefits that said company can bring to their own bottom line.

A Victory for the Budget

It has been reported that the nation’s government borrowed a sum totalling £107.7 billion in the previous financial year. This may seem a lot, but in fact it was significantly lower the £115.1 billion borrowed by the country the year before.

So what have the government set as the target for national borrowing rates? In the budget the Chancellor suggested that for the full year, the budget deficit should measure £107.8 billion. This means that not only has the national economy narrowed the gap, but it has done so by £0.1 billion than it expected to; always good news!

Specifically, the numbers quoted on the issue by the Office of National Statistics (ONS) suggests that leaving out fiscal interventions, borrowing fell from £11.4 billion in March 2013 to £6.7 billion for the month this year. Furthermore February’s data was revised from £9.3 billion to £8.8 billion.

A Psychological Boost

Figures like these have both physical and mental effects for UK economic growth, and one is as important as the other. Howard Archer, chief economist at analysts Global Insight commented on the issue:

"While in reality, it made little difference whether the chancellor just hit or just missed his fiscal target for 2013-14, the fact that he did make it provides a psychological boost for the government and it may support belief that he can hit his longer-term targets."

At RTA Business, we recognise that the psychological effect this will have on buyers will help you in your quest to sell your business. It will further convince them of the sustainability of the economic recovery, which will give them more incentive to expand by buying your business.