UK Public Sector Borrowing lower than expected in September
The Office for National Statistics (ONS) has today revealed UK public sector net borrowing fell last month.
According to the ONS, public sector net borrowing came in at a lower than expected £14.1 billion in September, boosted by tax receipts.
Analysts had expected borrowing to total £14.5 billion.
Furthermore, the ONS revised down the borrowing figure for August by £2 billion to £13.7 billion.
The Government’s independent Office for Budget Responsibility (OBR) is expecting public sector net borrowing to come in at £122 billion for the current tax year – lower than the £143 billion borrowed in the previous tax year.
The latest figures means the Government is on track to meet its deficit target.
So far this year, the Government has borrowed £63.5 billion - down £7.5 billion on the same period a year earlier.
Overall, public sector net debt stands at 62.6% of UK GDP (total economic output) – up from 55.3% this time last year.
However, analysts have cautioned that the debt crisis in the euro zone, together with the Government spending cuts and rising unemployment, may hit the economy and make it harder to sustain borrowing reductions.
In other news this week, the ONS revealed Consumer Price Inflation (CPI) accelerated to annual rate of 5.2% last month from August’s rate of 4.5%.
The rate represented the highest since September 2008 and it has never exceeded this rate since the CPI measure was first calculated in 1997.
Furthermore, last week, the ONS revealed UK unemployment rose sharply in the three months to August – rising to a 17-year high.
The ONS said unemployment rose by 114,000 in the three month period to 2.57 million, taking the unemployment rate to 8.1% – higher than forecasts.
Rising inflation and unemployment are putting further pressure on households’ budgets and this is likely to impact on spending, which could weaken economic growth further.
The sluggish economy and rising unemployment could hit taxation revenues and lower the Government’s chances of hitting its target, according to analysts.
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