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Government borrowing rises to £10.6bn in September | Government borrowing rises to £10.6bn in September |
(35 minutes later) | |
Government borrowing rose by more than expected to £10.6bn in September, according to figures from the Office for National Statistics (ONS). | |
The figure was £1.3bn higher than the same month last year. | |
For the financial year to date between April and September, borrowing fell by £2.3bn to £45.5bn. | |
The monthly figure had been expected to shrink to £8.5bn and economists said it would set the tone for the Autumn Statement on 23 November. | |
Paul Hollingsworth, UK economist at Capital Economics, said he expected Chancellor Philip Hammond "to announce a fairly disappointing set of fiscal forecasts" next month. | |
He said: "The latest outturn puts the public finances well off track to meet the Office for Budget Responsibility's (OBR) March forecast. | |
"Indeed, if the public finances continued on the current trend in the fiscal year to date, then borrowing would overshoot the OBR's forecast of £55.5bn for the fiscal year as a whole by around £17bn." | |
The ONS also said that Britain's public sector net debt rose by £39.5bn in September to £1.6 trillion, equal to 83.3% of total GDP. | |
Mr Hammond has already indicated that he will "reset" Britain's post-Brexit economic policy away from his predecessor George Osborne's aim of reaching a surplus by 2020 towards more investment in areas such as infrastructure. | |
In a statement, Mr Hammond said: : "We have already made significant progress in bringing the public finances under control, reducing the deficit by almost two-thirds since 2010, but our debt and deficit remain too high. | |
"We remain committed to fiscal discipline and will return the budget to balance over a sensible period of time, in a way that allows us the space to support the economy as needed." | |
Mr Hollingsworth speculated that the OBR may put forward borrowing forecasts for 2019-20 that are £25bn higher than its previous estimate. | |
Howard Archer, chief UK and European economist at IHS Global Insight, said: "We believe that the chancellor will look to provide meaningful support to the economy in November's Autumn Statement as he still sees a difficult outlook for the UK economy despite its current resilience. | |
"However, the scope for fiscal stimulus is limited by the still sizeable budget deficit and the prime minister and chancellor have both stressed the need for fiscal responsibility." |