pounds 1bn upset to Clarke's budget sums
Tuesday 19 December 1995
The Government borrowed nearly a billion pounds more than expected in November, throwing into doubt the forecasts of its borrowing requirement published in last month's Budget.
City economists said that the shortfall between revenue and spending in the current financial year could be more than the pounds 29bn the Chancellor predicted less than a month ago.
Figures yesterday showed the Public Sector Borrowing Requirement was pounds 3.7bn in November.
This took the total for the financial year so far to pounds 22.8bn, only a little lower than at the same stage the previous year.
Mr Clarke admitted in the Budget that the public finances had been disappointing this year. He revised up his forecast for the full-year for the second time, from pounds 22.3bn in the 1994 Budget and pounds 23.6bn this summer.
Yesterday the Treasury said there was no need to change the forecast after the latest PSBR figure.
However, Kevin Darlington, the senior economist at Hoare Govett, said:
''Government borrowing is likely to overshoot this year and next. There is no single problem that stands out but it is going to be a struggle for them to meet the target.''
The disappointment took gilts lower. Sterling also weakened to DM2.2028 due in part to a weaker dollar.
The borrowing total has been disappointing every month this financial year - except the figure for October, which was published just before the Budget.
The Government made a debt repayment of pounds 992m (revised down from pounds 1.3bn) that month.
Privatisation revenues could turn out to be less than the predicted pounds 3bn in 1995/96. Although negligible so far, there will be pounds 500m from the sale of the Government's residual share of BP this month, and about pounds 1.2bn from the second stage of the sale of the electricity generating companies in the new year.
The rest will be have to be made up by selling miscellaneous holdings of debt.
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