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UK borrowing hits record £163.4bn | UK borrowing hits record £163.4bn |
(20 minutes later) | |
Government borrowing hit a record high of £163.4bn in the last financial year, official figures have shown. | Government borrowing hit a record high of £163.4bn in the last financial year, official figures have shown. |
The borrowing figure for the 2009-10 financial year is lower than the £166.5bn predicted by Chancellor Alistair Darling in April's Budget. | The borrowing figure for the 2009-10 financial year is lower than the £166.5bn predicted by Chancellor Alistair Darling in April's Budget. |
Including financial intervention measures, borrowing totalled £152.8bn - lower than the £155.9bn forecast. | Including financial intervention measures, borrowing totalled £152.8bn - lower than the £155.9bn forecast. |
It is the biggest annual borrowing figure for a UK government in peacetime. | It is the biggest annual borrowing figure for a UK government in peacetime. |
A total of £23.5bn was borrowed in March, the figures from the Office for National Statistics (ONS) showed. | A total of £23.5bn was borrowed in March, the figures from the Office for National Statistics (ONS) showed. |
Borrowing in March is typically high as civil servants seek to spend the remainder of their annual budgets. | Borrowing in March is typically high as civil servants seek to spend the remainder of their annual budgets. |
Total government debt now stands at £890bn - equivalent to 62% of GDP. | Total government debt now stands at £890bn - equivalent to 62% of GDP. |
The £163.4bn borrowed is equivalent to 11.6% of GDP. | The £163.4bn borrowed is equivalent to 11.6% of GDP. |
Although the annual figure came in below the Budget prediction, City analysts reacted cautiously. | Although the annual figure came in below the Budget prediction, City analysts reacted cautiously. |
"The big picture is that this is still the biggest budget deficit since World War II," said Jonathan Loynes, economist at Capital Economics. | "The big picture is that this is still the biggest budget deficit since World War II," said Jonathan Loynes, economist at Capital Economics. |
"With all parties' fiscal plans based on extremely optimistic economic assumptions and unspecified spending cuts, a further sizeable fiscal squeeze will still be needed after the election, whoever is in charge." | "With all parties' fiscal plans based on extremely optimistic economic assumptions and unspecified spending cuts, a further sizeable fiscal squeeze will still be needed after the election, whoever is in charge." |
All major political parties have pledged to tackle the growing budget deficit following the next election. | All major political parties have pledged to tackle the growing budget deficit following the next election. |
But their plans rely in part on the recovery of the economy boosting tax income and therefore reducing borrowing. | But their plans rely in part on the recovery of the economy boosting tax income and therefore reducing borrowing. |
Many view the Treasury's current predictions of between 3% and 3.5% growth in the 2011 calendar year as too optimistic, with an average of City forecasters suggests growth of around 2.25%. | Many view the Treasury's current predictions of between 3% and 3.5% growth in the 2011 calendar year as too optimistic, with an average of City forecasters suggests growth of around 2.25%. |
However, the slow recovery so far already appears to have helped cut borrowing. In March, tax income rose by 3.8% according to the ONS. | However, the slow recovery so far already appears to have helped cut borrowing. In March, tax income rose by 3.8% according to the ONS. |
Income from VAT also rose following the return to the 17.5% rate at the start of the year, and corporation tax receipts were up by more than 50%. | Income from VAT also rose following the return to the 17.5% rate at the start of the year, and corporation tax receipts were up by more than 50%. |