Government borrowing rises

City A.M. Reporter
The government borrowed almost twice as much as expected in February, official data showed.

With Britain's triple-A rating now under warning from credit ratings agencies, the government must convince markets that it will stick to its ambitious deficit-reduction plan and stand up to calls to ease back on the pace of cuts.

The Office for National Statistics said that public sector net borrowing excluding public sector interventions - the government's preferred measure - hit a record for the month of February. It jumped to £15.183bn last month to from £8.875bn in February 2011.

The ONS said February's jump in borrowing was driven by a 2.7 per cent drop in tax receipts on the year, while government spending climbed 8 percent.

Income tax alone dropped 12.4 per cent on the year in February, whilst net social benefits climbed 11.2 percent. The ONS said government departments tended to backload their s pending, but that had been more marked in February than last year.

The broader public sector net borrowing measure – which includes the cost of bailing out Britain's banks, as well as some revenues from the sector – rose to 12.909 bil lion pounds in February, up from £6.066bn in February 2011.

Britain's total public sector net debt, excluding financial sector interventions, rose to £995bn or 63.1 per cent of GDP in February. Including the cost of bank support, it fell to 137.9 per cent of GDP.