Public sector borrowing hits £15.9bn in August
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Public sector borrowing hit £15.9bn at the end of August compared to £14.1bn latest year, the Office of National Statistics reports.
But annual public borrowing is forecast to come in at £58.1bn in 2010/11, a 3.8% drop on the £61.9bn borrowed in the last year.
The Budget deficit climbed to £13.3bn from £11bn last year but the annual figure is predicted to be £46.6bn, nearly £4bn less than 2009/10.
Both figures exclude the impact of temporary financial interventions in the UK economy.
Net debt amounted to £823.3bn, equivalent to 56.3% of GDP or £934.9bn, equivalent to 64% including financial interventions.
Official data showed that interest payments on gilts rose because of higher levels of inflation but the pound barely moved in reaction to the data.
Mark Bolsom, head of the UK Trading Desk at Travelex Global Business Payments, says the amount was higher than expected by most experts.
He adds: “Tax receipts are still rising so chancellor Osborne won’t have to revise his current borrowing forecasts yet, although he will be disappointed by the overshoot. Whilst the data is concerning, the fact that sterling barely reacted suggests that the markets are reassured by the Coalition’s promises to reduce public borrowing.
The measures, excluding the temporary effects of the financial interventions, are used by the Office for Budget Responsibility to forecast the public finances and by HM Treasury for the purposes of fiscal policy.
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