Blow for George Osborne as borrowing figures jump

 

Chancellor George Osborne's deficit-busting plans were dealt a blow today as the last borrowing figures to be published before his Autumn Statement revealed further pressure on the public finances.

Public sector net borrowing, excluding financial interventions such as bank bailouts, was £8.6 billion in October, up £2.7 billion on the same month last year.

The Chancellor wants to record borrowing for the full year 2012/2013 of £120 billion, compared with £121.4 billion in the previous year, but this is looking increasingly unlikely.

Mr Osborne is now widely expected to announce in his Autumn Statement in December that the Government will be unable to start bringing down debt as a percentage of GDP in 2015/16.

The chances of the Chancellor altering the debt target were heightened after Bank of England governor Sir Mervyn King effectively endorsed such a move, on condition that the global economy was growing slowly.

If Mr Osborne sticks to the debt target, he will be faced with the unpopular decision of announcing potentially large tax rises and further spending cuts in December.

Public sector borrowing for the year to date is £73.3 billion, excluding a one-off £28 billion boost from the transfer of the Royal Mail pension fund into Treasury ownership, which is £5 billion higher than the same period last year.

Within the October figures, the picture was much the same as previous months, with Government spending outstripping tax receipts.

Total tax receipts were 1.8% higher at £47.5 billion in October, while total expenditure rose 7.4% to £52.8 billion.

Tax revenues were dragged down by a drop in corporation tax, which fell 9.5% to £8.1 billion, while spending on social benefits, such as state pensions, jumped 7.7% to £16 billion.

Public sector net debt was £1.1 trillion at the end of October, equal to 67.9% of gross domestic product (GDP), compared with £971 billion or 63.4% of GDP last year.

A Treasury spokesman said: "The economy is healing, but it still faces many challenges. These numbers illustrate that, but also show the Government's plans to bring spending under control are on track for the year."

Downing Street said lower receipts reflected the "global economic position" and downward revisions to growth prospects.

"The economy is healing but it still faces major challenges. What today's figures show is that the Government's spending plans remain on target," the Prime Minister's spokesman said.

"Receipts are slightly lower than forecast at the time of the Budget and that reflects the global economic position and the downward revisions we've seen to growth prospects since March."

The spokesman added: "It's going to take some time to get the deficit down but we are sticking to our planned reductions and borrowing is a quarter down on where it was back in April 2010."

PA

Suggested Topics
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksNow available in paperback
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Savvy Media Ltd: Media Sales executive - Crawley

£25k + commission + benefits: Savvy Media Ltd: Find a job you love and never h...

Austen Lloyd: Corporate Solicitor NQ+ Oxford

Excellent Salary: Austen Lloyd: CORPORATE - Corporate Solicitor NQ+ An excelle...

Reach Volunteering: Financial Trustee and Company Secretary

Voluntary Only - Expenses Reimbursed: Reach Volunteering: A trustee (company d...

Recruitment Genius: Senior Project Manager

£45000 - £65000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

In a world of Saudi bullying, right-wing Israeli ministers and the twilight of Obama, Iran is looking like a possible policeman of the Gulf

Iran is shifting from pariah to possible future policeman of the Gulf

Robert Fisk on our crisis with Iran
The young are the new poor: A third of young people pushed into poverty

The young are the new poor

Sharp increase in the number of under-25s living in poverty
Greens on the march: ‘We could be on the edge of something very big’

Greens on the march

‘We could be on the edge of something very big’
Revealed: the case against Bill Cosby - through the stories of his accusers

Revealed: the case against Bill Cosby

Through the stories of his accusers
Why are words like 'mongol' and 'mongoloid' still bandied about as insults?

The Meaning of Mongol

Why are the words 'mongol' and 'mongoloid' still bandied about as insults?
Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

Kenyans still waiting for justice over Mau Mau uprising

Thousands join class action over Britain's role in the emergency
Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

The last Christians in Iraq

After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Britain braced for Black Friday
Bill Cosby's persona goes from America's dad to date-rape drugs

From America's dad to date-rape drugs

Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
Clare Balding: 'Women's sport is kicking off at last'

Clare Balding: 'Women's sport is kicking off at last'

As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'
Oh come, all ye multi-faithful: The Christmas jumper is in fashion, but should you wear your religion on your sleeve?

Oh come, all ye multi-faithful

The Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Dr Charles Heatley: The GP off to do battle in the war against Ebola

The GP off to do battle in the war against Ebola

Dr Charles Heatley on joining the NHS volunteers' team bound for Sierra Leone
Flogging vlogging: First video bloggers conquered YouTube. Now they want us to buy their books

Flogging vlogging

First video bloggers conquered YouTube. Now they want us to buy their books
Saturday Night Live vs The Daily Show: US channels wage comedy star wars

Saturday Night Live vs The Daily Show

US channels wage comedy star wars
When is a wine made in Piedmont not a Piemonte wine? When EU rules make Italian vineyards invisible

When is a wine made in Piedmont not a Piemonte wine?

When EU rules make Italian vineyards invisible