Public sector borrowing falls

Public sector net borrowing fell by £700 million to £12.8 billion in September, according to the Office for National Statistics.

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Borrowing 'better than expected'

Britain's public finances deteriorated less than feared during the first six months of 2012, but it looks like Chancellor George Osborne will still be forced to announce in his Autumn Statement that the Government will miss its target to bring down debt as a percentage of GDP by 2015 / 2016.

  • Public sector debt was at £1.1 trillion at the end of September 2012, or 67.9% of GDP
  • Public sector debt was at £972.5 billion at the end of September 2011, or 63.6% of GDP

Brian Hilliard, economist at Societe Generale, said the figures for September "will make life a bit easier" for the Government:

This is much, much better than they would have thought only a month ago. It's still an overshoot compared to the plans but it does make their life a bit easier.

Government spending up 3.7% in September

A slight improvement in overall economic activity pushed tax receipts up by 3.7% to £42 billion in September, but this was mitigated by government spending rising 3.7% to £52.5 billion.

Taking away the impact of the one-off transfer of £28 billion of Royal Mail pension funds, public borrowing increased compared to last year.

  • The cost of social benefits, including unemployment claims, rose 1.6%
  • Public borrowing was at £65.1 billion, compared to £62.4 billion last year


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