Government borrowing hits record peak
The amount of public sector borrowing hit fresh record highs last month, according to the government’s Office for National Statistics.
All in all, net borrowing totalled £23.3bn, which was up from the £17.4bn it was a year ago and much more than analysts had previously expected. Due to increased spending on defence, the EU, and also health, borrowing figures were pushed even higher.
Among other things, the latest figures will more than likely raise concerns about the UK government’s efforts to reduce its budget deficit. While the new coalition spent 10.8% more last month than in November last year, VAT receipts fell at least 0.1%.
A spokesman for the Treasury commented that November’s borrowing figures detail why the government has been forced to take decisive steps to take the UK out of its financial danger zone. At present, The ONS say that public sector debt now stands at 58% of the UK’s GDP.
Thus far, public sector net borrowing for this current financial year has reached £104.4bn, although that is down slightly from £105.1bn in all for the same period in 2009. However, many analysts believe that the government will exceed its yearly borrowing target of around £148.5bn for the financial year that runs up until the 31st of March 2011.
Philip Shaw, current economist with asset management giants Investec, commented that the latest official figures are extremely disappointing, adding that they are a result of strong spending as well as receipts growth. In an attempt to get of the UK’s deficit, the government will purse a series of austerity measures.