Chancellor breathes a sigh of relief over borrowing figures

George Osborne eyeing the nation's deficit? Photo: Andrew Milligan/PA Wire

By the skin of his teeth he's done it.

This morning the Chancellor can breathe a little sigh of relief, knowing that government borrowing in the year 2012/13 grew by £120.6 billion (excluding some transfers). That is a whisker below the official forecast of £120.9 billion and, crucially, under 2011/12’s deficit of £121 billion.

This means George Osborne is still (just) keeping to the promise he made in the Autumn Financial Statement that the deficit is falling and "will continue to fall each and every year [of the forecast period]".

Cumulative public sector net borrowing by month excluding the temporary effects of financial interventions Credit: Office for National Statistics

That is a welcome piece of news for a Chancellor who has seen the UK lose another 'triple-A' credit rating and drawn criticism for his austerity plan from the International Monetary Fund in the past week.

And that's not to mention the prospect of leading the country into a triple-dip recession when GDP figures come out later this week.

He can point today to a deficit - the government's annual extra borrowing - that has fallen by almost a quarter over four years, although most of that reduction happened before 2012 and the underlying deficit appears now to have stuck at about eight percent of the economy.

That is still too high in the opinion of many. With growth in the economy still elusive and doubts about the pace of austerity cuts emerging from even the IMF - previously a cheerleader for the Chancellor - the coming years will be even tougher.