UK public borrowing hits record high

City A.M. Reporter
UK public sector net borrowing unexpectedly surged in November to the highest level ever recorded, official figures have shown.

The Office for National Statistics said public sector net borrowing, which smoothes some of the monthly volatility in government revenue and spending, came in at a record £22.77bn in November – up from £16.72bn a year ago and well above forecasts of around £17bn.

The deterioration was due to higher government spending, a bigger contribution to the EU and significantly higher spending on health and defe nce than in previous years, the ONS said.

The government's preferred measure on which fiscal forecasts are based, PSNB excluding financial sector interventions, came in at £23.31bn, up from £17.4bn a year ago, and also a record high.

Total public borrowing for the fiscal year to date is lower than it was a year ago.

However the figures are likely to raise concerns about the government's four-year plan to virtually eliminate the budget deficit.

The PSNB excluding financial interventions for the year to date came to £104.4bn compared to £105.07bn for the year-ago period, and the Office for Budget Responsibility forecasts it will hit £148.5bn this fiscal year.

The public sector posted a net cash requirement of £16.81bn, also above forecasts for a slight fall to £14bn and up from £14.78bn a year ago.

For the fiscal year to date, the PSNCR totals £83.52bn, below the £96.16bn recorded between April and November 2009.

The ONS said public sector net debt including financial sector interventions as a percentage of GDP rose to 65.2 per cent, its highest since records began in March 1993.

Excluding financial sector interventions, public sector net debt was 58 per cent of GDP, also the highest since records began.

Public concerns about the scale of austerity measures needed to reduce government borrowing are already weighing on confidence.

A survey by GfK NOP showed consumer morale held at its lowest level since July in December.