Deficit down in November as Treasury defies slow growth

Tim Wallace
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GOVERNMENT borrowing fell in November, putting the coalition on track to hit its deficit reduction targets, figures published by the Office for National Statistics yesterday showed – though the slowing economy could hit the target next year.

The deficit came in at £18.1bn last month, £2.3bn lower than in November last year. Current spending accounted for £15.7bn of the deficit, down from £17.4bn a year earlier.

Excluding the bank bailouts, the national debt now stands at £977.1bn, or 62.8 per cent of GDP, up from 62.3 per cent in October and 57.5 per cent in November 2010. Including financial interventions, the debt hits £2.306 trillion, or 148.1 per cent of GDP.

November’s deficit is always particularly high, as tax revenues are relatively low. It is not one of the quarterly months in which corporation taxes are paid, nor January when large volumes of income tax are handed over, and roughly £2bn is paid out in the winter fuel allowance.

“The concern is that borrowing may rise more than expected in coming months as the economy falters, due mainly to the knock-on effects of the Eurozone’s crisis,” said economist Chris Williamson at Markit.