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20/10/2009
Public Sector Borrowing Breaks Records
The UK's is living 'far beyond its means' with net borrowing which last month reached £14.8bn.
Overall, the Government's net borrowing for the last six months stands at £77.3bn - the highest half-yearly figure since the Office for National Statistics (ONS) records began in 1946.
The news comes as the recession continues taking its toll on tax revenues and is pushing up social security spending.
According to the ONS, there were 2.47 million people without a job last week. This figure shows unemployment is still rising - although its rate is slower - but still leading to a lower tax intake overall.
Currently, total debt stands at £824.8bn, which includes around £142bn as a result of the banking 'bail-outs'.
During this year, the Treasury expects borrowing to go even higher and reach a record £175bn.
However, despite the alarming situation, these figures are slightly lower than economists had expected.
Experts had calculated £15.3bn borrowing in September, but the £14.8bn was still a sharp increase - £6.1 billion higher - on the £8.7bn borrowed in the same month last year.
Liam Byrne, Chief Secretary to the Treasury, said the figures were "broadly in line with our forecasts".
He added: "Today's figures... reflect our action to lock in the recovery and get the economy growing again by the turn of the year."
However, Vicky Redwood from Capital Economics commented that, although the figures are better than expected, it still suggest that "the Chancellor will have to revise his projections for public borrowing higher in the forthcoming pre-Budget report".
Also the Liberal Democrats have expressed their views and said that the Government needed a credible plan on public borrowing.
"They......must clearly identify what spending it intends to cut to bring the deficit under control otherwise it will have to be assumed it intends to squeeze budgets across the public sector hurting vital public services," said Vince Cable, the Liberal Democrat Treasury spokesman.
(CL/BMcC)
Overall, the Government's net borrowing for the last six months stands at £77.3bn - the highest half-yearly figure since the Office for National Statistics (ONS) records began in 1946.
The news comes as the recession continues taking its toll on tax revenues and is pushing up social security spending.
According to the ONS, there were 2.47 million people without a job last week. This figure shows unemployment is still rising - although its rate is slower - but still leading to a lower tax intake overall.
Currently, total debt stands at £824.8bn, which includes around £142bn as a result of the banking 'bail-outs'.
During this year, the Treasury expects borrowing to go even higher and reach a record £175bn.
However, despite the alarming situation, these figures are slightly lower than economists had expected.
Experts had calculated £15.3bn borrowing in September, but the £14.8bn was still a sharp increase - £6.1 billion higher - on the £8.7bn borrowed in the same month last year.
Liam Byrne, Chief Secretary to the Treasury, said the figures were "broadly in line with our forecasts".
He added: "Today's figures... reflect our action to lock in the recovery and get the economy growing again by the turn of the year."
However, Vicky Redwood from Capital Economics commented that, although the figures are better than expected, it still suggest that "the Chancellor will have to revise his projections for public borrowing higher in the forthcoming pre-Budget report".
Also the Liberal Democrats have expressed their views and said that the Government needed a credible plan on public borrowing.
"They......must clearly identify what spending it intends to cut to bring the deficit under control otherwise it will have to be assumed it intends to squeeze budgets across the public sector hurting vital public services," said Vince Cable, the Liberal Democrat Treasury spokesman.
(CL/BMcC)
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