Friday, December 18, 2009
Borrowing on track, business investment revised higher
Posted by David Smith at 10:00 AM
Category: Thoughts and responses

The fact that Novemebr's borrowing figures were slightly less bad than the markets had expected showed how gloomy the markets have become about Britain's public finances. One milestone in today's numbers was that public sector net debt exceeded 60% of gross domestic product for the first time (60.2%).

Public sector net borrowing, at 20.3 billion, was a November record, and the cumulative total for this fiscal year is now 106 billion, compared with 49 billion in the corresponding period of 2008-9. There are four months of the fiscal year to go, so to meet the Treasury's 178 billion forecast, borrowing over that period has to be 72 billion. A year ago over the corresponding period it was 36 billion. It will be close. More here.

Also today, the Bank of England said lending to businesses remained weak, though the lenders cite weak demand for borrowing. More here. Business investment was revised from a 3% fall in the third quarter to one of 0.6%, which will add to the case for a third quarter GDP revision.