views

UK's finances take battering

THE nation&rsquo;s public finances suffered their worst six months on record between April and September, official data showed yesterday, with government borrowing more than double what it was in the same period last year.<br /><br />The Office for National Statistics said public sector net borrowing came in at &pound;14.8bn, a shade less than economists had expected but the worst September reading on record. That took the year-to-date total to &pound;77.3bn, the highest ever for the first six months of a financial year.<br /><br />The public sector net cash requirement came in at &pound;19.4bn last month, the highest deficit for a month of September on record and taking the total deficit since April to &pound;76.2bn -- also the worst on record for that period.<br /><br />The government expects borrowing to total &pound;175bn in the current financial year, though the figures may raise speculation that this forecast could be revised upward in a pre-Budget report expected in November.<br /><br />Total net debt rose &pound;824.8bn at the end of September, equivalent to 59 per cent of GDP. Excluding the cost of financial sector interventions, net debt was &pound;682.8bn or 48.9 per cent of GDP.<br /><br />British Chambers of Commerce chief economist David Kern said: &ldquo;The scale of the adjustment facing the UK over the next few years is unprecedented. <br /><br />&ldquo;Unless the government demonstrates that it can tackle the deficit without damaging wealth-creating businesses, the recovery will be threatened, the deficit will worsen further, and the country will face serious risks of further declines.&rdquo;