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Big increase in government borrowing last month

Public sector net borrowing reached £11.8bn in February, which compares with £9.5bn borrowed in February 2010, according to the ONS. This was a record level for any February.

The figure was far higher than economists had been forecasting and means that total public sector net borrowing is now at £123.5bn for the financial year to date, which is 9.6% down on the same period last year. However, the government still looks to be easily able to meet the £148.5bn forecast for the whole 2010-11 financial year, by the Office for Budget Responsibility.

Debt continues to pile up but government borrowing should come in below target.

In fact, with only one month to go to the end of the financial year, the Institute for Fiscal Studies estimates that the final figure for government borrowing will be £141bn. But, don’t expect the chancellor to bring in any ‘giveaways’ in today’s Budget, as the government is committed to keep spending on a tight rein.

Finally, public sector net debt (excluding financial interventions) was £875.8bn at the end of February 2011, which was equivalent to 58% of GDP. This compares to £729.9bn or 50.8% of GDP, recorded at the end of February 2010.

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Posted in GDP, government borrowing

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