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Jan 3 2018, 17:40 GMT
The government is now within touching distance of budget surplus, with today’s December numbers confirming another year of outperformance for the exchequer. We expect the deficit to equal 0.3% of GDP in 2017, falling to 0.2% in 2018. One concern is the increased reliance on corporation tax, now accounting for 16% of tax revenues and driving much of the tax outperformance. The volatility of corporation tax adds uncertainty to the government’s revenue base as demographic and infrastructure pressures significantly add to spending in the coming years.