UK Borrowing at Record High

Government borrowing hit a record high of £163.4bn this year, official figures have shown.

The borrowing figure for the 2009-10 financial year is lower than the £166.5bn predicted by Chancellor Alistair Darling in April's Budget.

Including financial intervention measures, borrowing totalled £152.8bn - lower than the £155.9bn forecast.

It is the biggest annual borrowing figure for a UK government in peacetime.

A further £23.5bn was borrowed in March, the figures from the Office for National Statistics (ONS) showed.

Borrowing in March is typically high as civil servants seek to spend the remainder of their annual budgets.

Total government debt now stands at £890bn - equivalent to 62% of GDP.

The £163.4bn borrowed is equivalent to 11.6% of GDP.

Although the annual figure came in below the Budget prediction, City analysts reacted cautiously.

"The big picture is that this is still the biggest budget deficit since the Second World War," said Jonathan Loynes, economist at Capital Economics.

"With all parties' fiscal plans based on extremely optimistic economic assumptions and unspecified spending cuts, a further sizeable fiscal squeeze will still be needed after the election, whoever is in charge."

Borrowing came in lower than expected partly as a result of a 3.8% increase in tax income in March.

Income from VAT also rose following the return to the 17.5% rate at the start of the year, and corporation tax receipts were up by more than 50%.

Posted at 03:34PM Apr 22, 2010 by Marc Stenton in The Economy  |  Comments[0]