Tags: UK | Public | Borrowing | Record | High

UK Public Borrowing Hits Record High in November

Tuesday, 21 Dec 2010 09:22 AM

British public sector net borrowing unexpectedly surged in November to its highest on record, due to higher health, defense and EU spending, official data showed on Tuesday.

The Office for National Statistics said public sector net borrowing, which smoothes some of the monthly volatility in government revenue and spending, came in at a record 22.774 billion pounds ($35.4 billion) in November up from 16.719 billion a year ago and well above forecasts for it to hold steady at around 17 billion.

The government's preferred measure on which fiscal forecasts are based, PSNB excluding financial sector interventions, came in at 23.314 billion pounds, up from 17.395 billion pounds a year ago, and also a record high.

Total public borrowing for the fiscal year to date is lower than it was a year ago. However the figures are likely to raise concerns about the government's four-year plan to virtually eliminate the budget deficit.

The ONS said the deterioration in the public finances was due to higher government spending, a bigger contribution to the EU and significantly higher spending on health and defense than in previous years.

The PSNB excluding financial interventions for the year to date came to 104.410 billion pounds compared to 105.067 billion for the year-ago period, and the Office for Budget Responsibility forecasts it will hit 148.5 billion pounds this fiscal year.

The public sector posted a net cash requirement of 16.811 billion pounds, also above forecasts for a slight fall to 14 billion pounds and up from 14.782 billion pounds a year ago.

For the fiscal year to date, the PSNCR totals 83.516 billion pounds, below the 96.158 billion recorded between April and November 2009.

The ONS said public sector net debt including financial sector interventions as a percentage of GDP rose to 65.2 percent, its highest since records began in March 1993.

Excluding financial sector interventions, public sector net debt was 58 percent of GDP, also the highest since records began.

Public concerns about the scale of austerity measures needed to reduce government borrowing are already weighing on confidence. A survey by GfK NOP showed consumer morale held at its lowest level since July in December.

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British public sector net borrowing unexpectedly surged in November to its highest on record, due to higher health, defense and EU spending, official data showed on Tuesday. The Office for National Statistics said public sector net borrowing, which smoothes some of the...
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