Borrowing reaches record £11.4bn

Posted on: 25 November 2009 by Mark O'haire

UK borrowing ballooned by a higher than expected £11.4 billion in October, official figures have shown.

The record rise for the month takes public sector net borrowing for the financial year so far to £86.9 billion, the Office for National Statistics (ONS) said.

The gloomy figures come a day after the Government unveiled a Fiscal Responsibility Bill - putting plans to halve the UK's deficit within four years on a statutory footing.

October is usually a strong month for the public finances due to corporation tax revenues, but the depth of the recession has hammered the Treasury's tax take.

The figures showed a record 13th successive month of declining current receipts - down 9% to £41 billion - but spending on factors such as unemployment benefits has risen.

This has pushed up the Government's total current expenditure to £48.6 billion, while net debt has reached £829.7 billion - £134.6 billion higher than a year ago and equivalent to more than 59% of GDP.

The Government says its new Bill demonstrates its commitment to putting the public finances in order, but the plans were lashed by Conservative leader David Cameron, who labelled it a "complete con".

Public borrowing is already forecast by the Treasury to reach £175 billion this year but the figures could have to be revised higher by Chancellor Alistair Darling in December's pre-budget.

This comes after the shock initial estimate of a 0.4% decline in output between July and September when the economy was finally expected to pull out of recession.

Bank of England Governor Mervyn King last week called for a "credible plan" to restore the public finances as he said the UK had "only just started" down the road to recovery.

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