UK public borrowing higher than forecast in February
The Office for National Statistics (ONS) has today revealed UK public sector borrowing was higher than expected last month.
According to the ONS, public sector borrowing was £11.8 billion in February – the highest for the month of February since records began in 1993.
Furthermore, the figure was far higher than the £6.9 billion expected by economists.
For the financial year to date, borrowing stands at £123.5 billion – meaning the Government is on target to meet its £148.5 billion borrowing – forecast by the Office of Budget Responsibility (OBR).
Overall, public sector net debt stands at £875.8 billion – the equivalent to 58% of UK GDP (total economic output).
Commenting, ING Bank economist James Knightley said: “The public finance numbers for February were significantly worse than expected.”
A report published yesterday by the Ernst & Young Item Club suggested the Government could be in line for an £8 billion windfall this year due to a rebound in tax revenues and a cut in public spending.
The Item Club is estimating public borrowing for the financial year to the end of March to be £140.2 billion – £8.3 billion lower than the OBR‘s forecast of £148.5 billion.
In other news today, the ONS announced UK Consumer Price Inflation (CPI) rose to an annual rate of 4.4% in February – the highest rate since October 2008.
The latest figures mean inflation is still way above the target of 2% – where it has been for more than a year and exceeded economists expectations of a rise to 4.2%.
Meanwhile, Retail Price Inflation (RPI), which includes mortgage costs and is used as the basis for many wage deals, surged to 5.5% in February, from 5.1% in January – this represents the highest level since July 1991.