British state borrowing falls in October

22nd November 2011, Comments 0 comments

The British government's borrowing fell by more than expected last month, official data showed on Tuesday, handing a boost to finance minister George Osborne one week before updated government forecasts.

Public sector net borrowing hit £6.5 billion (7.5 billion euros, $10.2 billion) in October, the Office for National Statistics (ONS) said in a statement.

That undershot market expectations for £6.8 billion, according to analysts polled by Dow Jones Newswires, and compared with net borrowing of £7.7 billion in October 2010.

Net borrowing fell as the government's taxation revenues increased at a faster pace than expenditure, according to the ONS.

The coalition government is committed to huge cuts in public expenditure to bring down a high ratio of public deficit to gross domestic product and eventually to reduce a debt mountain.

Britain is not in the eurozone, but is a member of the European Union and so is bound to respect EU budget rules, which it currently breaches, as well as reassure markets that it is controlling public finances.

The data comes before next week's economic forecasts from the government's independent Office for Budget Responsibility.

Many analysts expect that the OBR will cut its growth estimates and reveal a larger-than-expected hole in the public finances due to the weak state of the economy.

Osborne's Conservative-Liberal Democrat coalition government has sought to slash spending since coming to power last year when it inherited a record public deficit from the ousted Labour administration.

© 2011 AFP

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