UK’s public sector borrowing continues to soar

The Office for National Statistics (ONS) has today revealed that the UK’s public sector net borrowing hit a record high of £20.3 billion in November.

While the figure was less than the £23 billion analysts had expected, it was still the highest for any month since the ONS began gathering data over 16 years ago.

Overall debt now stands at £844.5 billion - the equivalent of 60.2% of GDP. In May, credit rating agency, Standard and Poor’s, said the UK’s debt burden may reach 100% of GDP.

In comparison, in November 2008, public borrowing was £15.5 billion, while net debt stood at £706.2 billion - the equivalent of 49.6% of GDP.

Commenting on the figures, James Knightley at ING, said: “The UK’s public finances have deteriorated further in November, but not as badly as the market had feared." 

 "Certainly the better labour market data is helping government finances and a return to growth will further help moderate the rate of deterioration,” he added.

Meanwhile, the overall level of public borrowing for this financial year is on target to hit the £178 billion forecast by the Treasury.

The recession has meant tax revenues have been hit, as well as a severe hike in unemployment benefits.

Official figures last week showed that UK unemployment rose by 21,000 in the three months to October to 2.491 million, taking the unemployment rate to 7.9% - a 13-year high.

However, the increase was slower than expected and was the smallest quarterly rise since March-May 2008

The number of Britons claiming jobseeker’s allowance (JSA) fell for the first time since February 2008.

Posted at 10:02PM Dec 18, 2009 by Kelly Board in The Economy  |  Comments[0]