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January 21, 2010    

UK’s public sector borrowing continues to soar

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by Kay Murchie

The Office for National Statistics (ONS) has today revealed that the UK’s public sector borrowing hit another record high of £15.7 billion in December.

While the figure was less than the £18.75 billion analysts had expected, it was still the highest December figure on record.

Overall debt now stands at £870 billion - the equivalent of 61.7% of GDP - the highest since records began in 1974.

Last May, credit rating agency, Standard and Poor’s, said the UK’s debt burden may reach 100% of GDP.

The figures reflect the fact that Britain has suffered the worst recession on record so tax revenues have been hit, as well as a severe hike in unemployment benefits.

However, the ONS revealed yesterday that UK unemployment fell by 7,000 in the three months to November to 2.46 million, taking the unemployment rate down to 7.8%.

Furthermore, the number of Britons claiming jobseeker’s allowance (JSA) fell by more than expected in December, down 15,000 to 1.61 million - its biggest amount since April 2007.

The economy, which has now contracted for six consecutive quarters, has been lagging behind other economies and is now the last major economy that is still in recession.

Official figures on 26 January will confirm whether the economy saw positive growth in the fourth quarter.

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