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 I was a Woman Against Feminism too
- 2 Is Gideon Levy the most hated man in Israel or just the most heroic?
- 3 Chief Ebola doctor in Sierra Leone has contracted the deadly disease himself
- 4 Students offered grants if they tweet pro-Israeli propaganda
Lana Del Rey: 'I have slept with a lot of guys in the industry'
Vladimir Putin employs a full-time food taster to ensure his meals aren't poisoned
Chief Ebola doctor in Sierra Leone has contracted the deadly disease himself
Students offered grants if they tweet pro-Israeli propaganda
Israel-Gaza conflict: Israel may have committed war crimes, says UN human rights chief
Malaysia Airlines MH17 crash: Vladimir Putin is given 'one last chance' to end hostilities in Ukraine
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
The truth about conspiracy theories is that some require considering
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: Massive rise in sale of British arms to Russia
Malaysia Airlines MH17 crash: victims’ bodies bundled in black bags and loaded onto trains
£110 - £130 per day + Pay between ?110 - ?130 Day: Randstad Education Cardiff:...
£480 per day + competitive: Progressive Recruitment: SAP Deployment Manager-Ta...
£50000 per annum + benefits: Progressive Recruitment: Urgently seeking a Dynam...
£350 - £400 per day: Orgtel: Test Lead, London, Banking, Financial Reporting, ...