Borrowing blowout highlights Osborne's challenge
Thursday 22 March 2012
A Budget-day borrowing blow for Chancellor George Osborne yesterday underlined the scale of his deficit-cutting task despite slightly better news on growth from his independent forecaster.
February's horrendous figures showed public borrowing hitting £15.2bn – a record for the month and nearly double the £8bn expected by the City. Borrowing for the first 11 months of the year is £110bn – still £8.9bn below last year but leaving far less margin for error on the Office for Budget Responsibility's £127bn target for the year.
The latest evidence of the Chancellor's slow fiscal repair job comes as he bids to hang on to the UK's prized AAA credit rating. The ratings agencies Moody's and Fitch have cut their outlook on the UK to "negative" in recent weeks, warning of the potential impact of the eurozone crisis and weaker growth on the pace of deficit reduction.
The OBR upgraded its UK growth forecasts marginally, to 0.8 per cent for the year, but Capital Economics' chief UK economist, Vicky Redwood, said: "The public finance figures are rather worse than the Chancellor would have hoped for."
Worryingly for the Chancellor, public spending jumped to £52.5bn in February, 8 per cent ahead of the same month last year, as departments splashed out and benefit costs soared by £1.5bn. Meanwhile tax receipts are faltering after a big drop in the income tax take.
The OBR's improved growth estimates for 2012 – albeit to a meagre 0.8 per cent – is the first upgrade of any kind by the fiscal watchdog in two years. In the 2009 Budget the then chancellor, Alistair Darling, was forecasting 3.5 per cent growth this year.
- 1 I've been called an abusive and dangerous parent, when all I did was listen to my transgender child
- 2 Migrant crisis: Greek soldier saved 20 people singlehandedly off Rhodes beach
- 3 Sofyen Belamouadden murder: The inside story of a crime that horrified Britain
- 4 Company breaks open Apple Watch to discover what it says is 'planned obsolescence'
- 5 Ian Brady: Moors murderer announces his support for Ukip and the SNP
Migrant crisis: Greek soldier saved 20 people singlehandedly off Rhodes beach
Russian hack of President Obama's emails worse than previously admitted
Ian Brady: Moors murderer announces his support for Ukip and the SNP
UK weather: Britain braced for snow as arctic air mass moves in
Nepal earthquake: US Pastor Tony Miano sparks outcry by suggesting Nepalis should not rebuild their 'pagan shrines'
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband
The sickening truth about food banks that the Tories don't want you to know
Migrant boat disaster: Ukip candidate mocks victims in sickening Twitter post
Nigel Farage wants the BBC to stop making programmes like Doctor Who, Strictly Come Dancing, and Top Gear
Global warming: Scientists say temperatures could rise by 6C by 2100 and call for action ahead of UN meeting in Paris
General Election 2015: Britain would become a 'communist dictatorship' under Ed Miliband and Nicola Sturgeon, claims wife of Michael Gove
iJobs Money & Business
£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...
£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...
£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...
£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...