By William Schomberg and Andy Bruce
LONDON (Reuters) - Britain's public finances improved in November helped by fines paid by banks for a foreign exchange scandal, giving some respite to Chancellor George Osborne as he tries to show voters he can keep on bringing down the deficit.
Separately, retailers reported booming sales, underscoring how consumers are propelling Britain's strong economic recovery.
The two data releases represented welcome news for Osborne and Prime Minister David Cameron ahead of what promises to be a tight election in May. They say the recovering economy is only safe in their hands, countering claims of a cost-of-living crisis by the opposition Labour party.
The government's record on the economy took a hit in recent months when the budget deficit stopped falling and started to widen again, forcing Osborne to accept a watering down of his deficit targets this financial year and in 2015/16.
Receipts in November were boosted by 1.1 billion pounds in fines for the banks involved in the foreign exchange rate-fixing scandal, money which has already been earmarked as extra funding for Britain's National Health Service.
But there were also signs of an underlying improvement as income tax receipts and national insurance contributions rose nearly 3 percent in November, twice as fast as in October.
Victoria Clarke, an economist at Investec bank, said the numbers were moving in Osborne's favour and he should at least manage to keep the deficit falling this year, or even meet his revised targets, which have looked out of reach. "Just months ahead of the ... election, this would be a major plus," she said.
The Office for National Statistics said public sector net borrowing, excluding state-controlled banks, fell 10 percent in November to 14.1 billion pounds.
That meant the gap in the first eight months of 2014/15 was 0.6 percent lower than a year earlier at 75.8 billion pounds.
The deficit in previous months was also revised down.
Fixing the public finances has been the policy priority of Osborne, Cameron and their Liberal Democrat coalition partners since they came to power in 2010. But their plans to clear the deficit by 2015 were knocked way off course by slow growth in Britain for much of the period since the global financial crisis.
Even the strong economic recovery since mid-2013 has not helped much as wages have grown only slowly, limiting income tax receipts. Data earlier this week suggested earnings are now rising more strongly, which could filter into more tax receipts.
Separately on Friday, retailers reported sales in late November and early December were their strongest since 1998, boosted by U.S.-style Black Friday promotions.
But, possibly reflecting concerns about the global economic outlook, a measure of consumer confidence fell to its second- lowest level for 2014 in November.
(Writing by William Schomberg; Editing by Mark Trevelyan)