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Improvement in public sector finances

Public sector net borrowing in January 2011, showed a surplus of £3.7 billion compared with a deficit of £1.3 billion in the same month last year. Traditionally the country does show a surplus during January as a result of a lot of income tax and corporation tax bills being paid, but these figures are a vast improvement on last year.

The government is showing some success in cutting borrowing.

This means that public sector net borrowing was £113.0 billion in the year to date for 2010/11, which is down from £127.2 billion over the same period last year. The independent Office for Budget Responsibility has forecast total net borrowing this financial year of £149 billion.

The government is busy cutting public expenditure and raising taxation at the moment as part of its austerity measures, to cut public sector borrowing and reduce national debt.

Although the deficit on current net borrowing is falling, public sector net debt was £867.2 billion at the end of January 2011, which was equivalent to 57.6% of GDP. This compares to £720.9 billion at the end of January 2010, which was 50.4% of GDP.

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Posted in government borrowing, Public Finances

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