August public sector borrowing higher than expected

| September 21, 2010 | 0 Comments

The Office for National Statistics (ONS) has today revealed public sector net borrowing totalled £15.302 billion in August - a record high for the month.

The figure was higher as interest payments on gilts rose because of higher inflation. It was also much higher than the £12.51 billion expected by analysts.

However, despite this, receipts are still rising and the figures indicate that the Government is on target to maintain its full-year forecast.

The improvement in tax receipts has been primarily due to the narrowing of the deficit.

Overall, public sector net debt stands at £934.9 billion – the equivalent to 64% of GDP.

The deficit hit 11% of GDP last year but the coalition Government has made cutting the deficit its top priority and has announced plans to bring this down to 10.1% this year.

Yesterday, credit rating agency Moody’s said the UK’s top-ranked AAA credit rating is safe, as a result of the tough austerity measures, introduced by the coalition Government to bring down the deficit.

Despite slower economic growth, the rating agency said the outlook for the UK’s public finances remained stable.

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