George Osborne to face borrowing pressure as missed targets loom
Thursday 20 September 2012
Chancellor George Osborne will come under increased pressure tomorrow as official figures show Government borrowing is on course to miss full-year targets.
Public sector net borrowing, excluding financial interventions such as bank bailouts, is expected to be £15.2 billion in August, up from £14.6 billion in the same month last year.
The weaker figures will trouble the Chancellor, who wants to trim borrowing in 2012/2013 to £120 billion, excluding a one-off £28 billion boost from the transfer of the Royal Mail pension fund into Treasury ownership, from £127.6 billion last year.
A lack of tax receipts - a consequence of recession and the sluggish recovery - will continue in August while higher benefit spending is expected to keep the pressure on Government expenditure.
Howard Archer, chief UK and European economist at IHS Global Insight, said: "It already looks odds-on that the Chancellor will miss his 2012/13 fiscal targets and his longer-term targets also look increasingly at risk."
The Chancellor will give his autumn statement in early December when many analysts expect him to either acknowledge that he will be unable to start bringing down debt as a percentage of GDP by 2015/16 or announce further austerity measures.
The July public finance figures were particularly disappointing as the Government borrowed £557 million when there is normally a surplus or repayment as it is a major month for tax receipts.
It was only the third time in the last 15 years that the Government has not recorded a surplus in July.
Net borrowing in the financial year to July, excluding the Royal Mail pension effect, came in at £44.9 billion, which is £9.3 billion higher than a year ago.
Further disappointment in August will add to fears that the UK's cherished AAA credit rating could be at risk and spark calls for Mr Osborne to change course with his deficit-busting plans.
Mr Osborne is in the process of rolling out billions of pounds of spending cuts and hundreds of thousands of public sector job losses in a bid to slash the budget deficit.
- 1 James Foley 'beheaded': Isis video shows militant with British accent 'execute US journalist' – and warns Obama of more to come
- 2 ALS ice bucket challenge co-founder Corey Griffin drowns aged 27
- 3 Cilla Black defends Cliff Richard: 'I am positive that the allegations are without foundation'
- 4 Nicki Minaj finally releases predictable 'Anaconda' video
- 5 James Foley 'beheading': Met police warn public watching murder video could be criminal offence
James Foley 'beheaded': PM cuts holiday short for emergency meeting on British response to latest Isis atrocity
Michael Brown shooting: Police shoot and kill second young black man near Ferguson
ALS ice bucket challenge co-founder Corey Griffin drowns aged 27
James Foley 'beheaded': Isis video shows militant with British accent 'execute US journalist' – and warns Obama of more to come
Iraq crisis: Islamic State's message to America - 'We will drown you all in blood'
Scottish independence: English people overwhelmingly want Scotland to stay in the UK
Isis threat: Cameron wants an alliance with Iran
Crisis? What crisis? A visiting US doctor gives the NHS a rave review
Ukip MEP calls for reintroduction of death penalty on fiftieth anniversary of last deaths
Russell Brand calls for Israel boycott: Comedian urges big businesses that 'facilitate the oppression of people in Gaza' to pull funding
Michael Brown shooting: Chaos erupts on the streets of Ferguson after autopsy shows teenager was shot six times – twice in the head
£45000 per annum: Harrington Starr: Quantitative Analyst (Financial Services, ...
Negotiable: Harrington Starr: Application Support Engineer (C++, .NET, VB, Per...
Negotiable: Harrington Starr: C# .NET Software Developer (Client-Side, SQL, VB...
£40000 - £60000 per annum + Benefits + Bonus: Harrington Starr: C# Developer (...