British state borrowing hits record April peak: official

24th May 2011, Comments 0 comments

The British government's borrowing ballooned in April to a record amount for the month on the back of lower taxation receipts and rising interest costs, official data showed on Tuesday.

Public sector net borrowing hit £10 billion (11.5 billion euros, $16.1 billion) in April, the first month of the 2011/2012 financial year, the Office for National Statistics (ONS) said in a statement.

That overshot market expectations for £6.5 billion, according to analysts polled by Dow Jones Newswires, and compared with net borrowing of £7.3 billion in April 2010.

An ONS official said that last year's tax take was boosted by the British government's levy on bank bonuses. The one-off measure had lifted state coffers by £3.5 billion in April last year.

Added to the mix, the interest that the government pays on its debt rose to £4.6 billion last month. That compared with £3.6 billion last time around.

"April's UK public finance figures get the new fiscal year off to a bad start," said economist Samuel Tombs at the Capital Economics consultancy.

However, in a further twist, the ONS also downgraded March 2011 borrowing to £17.9 billion, compared with the £18.6 billion given last month.

As a result, in the 2010/2011 fiscal year, the public sector borrowed £139.3 billion, it added on Tuesday.

That is less than the £145.9 billion given last month, and even further underneath the £145.9 billion forecast from the Office for Budget Responsibility in March.

© 2011 AFP

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