British public borrowing hits September record high: data

20th October 2010, Comments 0 comments

British public sector overspending widened in September to a record high level for the month, official data showed on Wednesday shortly before the government was to announce massive spending cuts to slash debt.

The public sector net borrowing requirement jumped to 16.2 billion pounds (18.4 billion euros, 25.5 billion dollars), the Office for National Statistics (ONS) said in a statement.

That compared with borrowing of 15.5 billion pounds in September 2009. Analysts had forecast a rise to only 15.7 billion pounds according to a survey by Dow Jones Newswires.

Britain's government is being forced to borrow massively as the recent recession slashed tax revenues and as the taxpayer was forced to rescue banks left on the brink of collapse by the global financial crisis.

The country suffered a record net borrowing of 154.7 billion pounds in 2009/2010, which has led Prime Minister David Cameron's Conservative-Liberal Democrat government to plan massive cuts to government budgets.

The coalition has forecast a deficit of 149 billion pounds for 2010/2011, while the September data means that Britain has so far borrowed 73.5 billion pounds during the current financial year which ends in April 2011.

This is however lower than at the same stage in 2009.

Cameron's coalition wants to cut spending by 83 billion pounds by 2014-15, and Wednesday's review will reveal exactly where the axe will fall.

Finance minister George Osborne is expected to say his plans, which will cut departmental spending by an average of 25 percent, will map out "a hard road to a better Britain," according to reports.

An alternative measure of the deficit, the public sector net cash requirement, rose to 20.7 billion pounds in September, the ONS added on Wednesday. The PSNCR climbed from a level of 19.2 billion pounds in September 2009.

© 2010 AFP

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