George Osborne to face borrowing pressure as missed targets loom
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 Man and woman arrested on suspicion of conspiracy to murder victim of Woolwich machete attack, named as Drummer Lee Rigby
- 2 'Sickening, deluded and unforgivable': Horrific attack brings terror to London’s streets
- 3 Grace Dent: I’m not sure how these people can avoid being called ‘bigots’. And the more ‘civilised’, the worse they are
- 4 Woolwich murder: They killed, then they performed - these men should be starved of our attention
- 5 Woolwich attack: The EDL will seek to exploit this evil crime for their own evil ends
BMF is the UK’s biggest and best loved outdoor fitness classes
Find out what The Independent's resident travel expert has to say about one of the most beautiful small cities in the world
Nook is donating eReaders to volunteers at high-need schools and participating in exclusive events throughout the campaign.
Get the latest on The Evening Standard's campaign to get London's children reading.
Win anything from gadgets to five-star holidays on our competitions and offers page.