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December 18, 2008    

Public sector borrowing hits record £16bn

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by Kay Murchie
”Public

Figures from the Office for National Statistics have revealed that the UK’s public finances deteriorated sharply again in November, with net borrowing rocketing to a high of £16 billion.

The figure was far higher than analysts expectations who forecast £13.7 billion.

Borrowing for the first eight months of the financial year now totals £56.1 billion, compared with £29.2 billion at the same period in 2007.

However, as the economic downturn continues, it is likely that net borrowing could soar to £118 billion next year, according to Chancellor Alistair Darling.

According to analysts, the figures are worrying, particularly at such an early stage of the recession.

According to Howard Archer of IHS Global Insight, the deepening economic downturn is taking an increasing toll on tax revenues.

Furthermore, low housing market activity and a continued fall in house prices is affecting stamp duty receipts, added Mr Archer.

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