Public borrowing hits new record as cuts loom

City A.M. Reporter
Public borrowing hit a record high for a month of September, the Office for National Statistics, as chancellor George Osborne prepared to deliver an announcement of £80bn of spending cuts.

The government's preferred measure of borrowing, which excludes financial sector interventions, also hit its highest for a month of September since records began in 1993.

The total public sector net debt as a percentage of GDP rose to a record 64.6 per cent, the highest for any month since records began in 1993.

The government is likely to seize the figures as evidence of the urgent need for fiscal tightening, despite concerns from opposition politicians and some economists that it could tip Britain back into recession.

The ONS said that public sector net borrowing rose to £15.607bn last month from £14.806bn a year ago versus economists' expectations for a fall to £14.2bn.

For the financial year to date, PSNB is running at £70.156bn, down from £75.145bn for the April-September period last year.

Excluding financial sector interventions, September's PSNB was 16.166 billion pounds, also higher than the same month last year.

For the year to date, this came to £73.548bn compared to £77.376bn a year earlier, and the Office for Budget Responsibility forecasts it will hit £149bn his fiscal year.