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Highest August borrowing figure on record

UK Public Sector Net Borrowing (PSNB) in August was a surprise £15.9 billion. This was a rise of £1.9 billion on August last year and was the highest August total on record, and well above the market forecasts of just over £13 billion.

Government net debt now stands at 61.4% of GDP

So far this fiscal year, between April and August, total PSNB has totalled £51.5 billion. This is 7% below last year’s figure for the same period of £55.3 billion.

In 2010-11 PSNB reached £141.1 billion and the government is targeting a figure of £122 billion for 2011-12. The current outturn is largely on track but with higher unemployment and lower growth it will become increasingly difficult for the government to attain its forecast of a 14% drop in total net borrowing.

Government expenditure for this fiscal year is currently running at 3.7% above forecast which is not too scary, but the Office for Budget Responsibility says there are a number of factors which could see tax revenues dragged down. They are particularly concerned about a slowdown in bank profitability and lower production rates in the North Sea of oil and gas.

Total government net debt now stands at 61.4% of GDP, compared with 55.3% in August 2010.

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Posted in government borrowing, government spending, Public Finances

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