Public borrowing and inflation rise
Public borrowing recorded its worst February since records began, and inflation surged more than expected to a 28-month high, official data showed.
The news comes as Chancellor George Osborne puts the final touches to his 2011 Budget due on Wednesday, and is also likely to worry Bank of England policymakers trying to wrestle inflation back to its two per cent target.
The Office for National Statistics said consumer price inflation rose to 4.4 per cent in February from 4.0 percent in January, significantly higher than the 4.2 per cent forecast by economists.
Higher housing costs, domestic heating bills and clothing prices drove the increase in CPI, the ONS said.
Retail price inflation, which is based on a longer-running index and is used as a starting point for many wage negotiations, rose to 5.5 per cent from 5.1 per cent, its highest since July 1991.
The ONS said that public sector net borrowing totalled £10.280bn in February, up from 8.105 billion pounds for the same month in 2010 and well above economists’ median forecasts of 8.0 billion pounds.
The government’s preferred measure, PSNB excluding financial sector interventions, rose to £11.771bn. Both measures were the highest for a month of February since records began in 1993.
The figures mark a sharp turnaround from January, due to an unwinding of the exceptional receipts for self-assessed income tax received in that month.