George Osborne on course to undershoot £120 billion borrowing target by more than £10 billion

George Osborne on course to massively undershoot £120 billion (Reuters)

Chancellor George Osborne is on course to undershoot his £120 billion borrowing target by more than £10 billion this year as public finance figures showed Government departments getting a grip on spending last month.

August’s net borrowing of £13.2 billion was £1.3 billion below a year earlier. Stripping out one-off factors such as the transfer of the Royal Mail pension fund and Treasury proceeds from the Bank of England’s money-printing programme, the deficit in the first five months of the new financial year was £3.7 billion lower at £46.8 billion.

August saw a 2.2% fall in departmental spending, compared with a 1.4% rise in receipts over the month. Total current spending is still rising over the year so far but at a much slower rate than receipts. IHS Global Insight’s Howard Archer said: “If current trends were continued, underlying borrowing would come in at £107.2 billion in 2013-14, which is well below the target of £120 billion.”