UK borrowing rockets to new record

Posted on December 30th, 2010 | Categories - News

Government borrowing has hit an all time high.

Borrowing surged this November indicating that the Treasury may have to reign in UK finances.

Public sector net borrowing hit the highest level since records began totalling a massive £23.3 billion in November.

The figures revealed by the Office for National Statistics show that net borrowing was £6 billion higher than the same period last year, contrary to the predictions made by experts that a small improvement would surface.

Andrew Goodwin, senior economic advisor to the Ernst & Young ITEM Club said: “These figures really are a bolt from the blue. The November figures pretty much wipe out all of the 2010/11 reduction in borrowing in one fell swoop”.

The research showed that the total net debt, without the cost of bank bail-outs, stood at 58% of gross domestic product, which is equivalent to £836 billion. With the bank rescues included the figure rose to £971 billion.

The current level of net borrowing for 2010 so far stands at £104.4 billion, which is just short of the £105.1 billion seen during the same period last year.

Marc Ostwald, strategist at Monument Securities said: “Expenditure seems to be a lot higher than planned and one has to wonder whether some departments will soon be running out of money”.

However, the Treasury said the numbers are “in line” with the forecasts made by the Office for Budget Responsibility.

A spokesman said: “November’s borrowing figures show why the Government has had to take decisive action to take Britain out of the financial danger zone”.