Tuesday, January 24, 2012
Public borrowing continues to fall
Posted by David Smith at 01:00 PM
Category: Thoughts and responses

Public sector net borrowing was 13.7 billion last month, down from 15.9 billion a year earlier. The current budget deficit was 10.8 billion, down from 13.3 billion in December 2010. Upward revisions to earlier data mean that cumulative borrowing for the first nine months of the fiscal year, 103.3 billion, was below the 114.6 billion recorded in the corresponding period of 2010-11. So borrowing will be lower this year, but the difference will not be massive.

Will it undershoot the Office for Budget Responsibility's revised borrowing figure of 127 billion for the current fiscal year? I think so, and I thought the upward revision from 122 billion in November was unnecessary. But we'll see. The OBR's analysis, here, points out that borrowing will need to be 2.3 billion higher than a year earlier for the final three months for the target to be hit. It expects government spending to come in stronger and VAT and bonus-related taxes to be weaker.

The Office for National Statistics highlighted the fact that public sector net debt rose above 1 trillion for the first time.