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Public borrowing at £7.7bn in October Public borrowing at £7.7bn in October
(35 minutes later)
Government borrowing fell to £7.7bn in October, official figures show, down £0.2bn from a year earlier.Government borrowing fell to £7.7bn in October, official figures show, down £0.2bn from a year earlier.
Between April and October, government borrowing was £64.1bn, an increase of £3.7bn from the same period last year.Between April and October, government borrowing was £64.1bn, an increase of £3.7bn from the same period last year.
While unemployment has fallen, income tax receipts have also fallen, the Office for National Statistics said.While unemployment has fallen, income tax receipts have also fallen, the Office for National Statistics said.
Slow wage growth and large numbers of people earning less than the threshold for income tax may have affected receipts.Slow wage growth and large numbers of people earning less than the threshold for income tax may have affected receipts.
The borrowing figure for October was slightly better than analysts' expectations of £7.9bn. 'Hugely challenged'
At the Budget in March, Chancellor George Osborne said he aimed to cut borrowing by more than 10% in the coming year, but borrowing for the financial year to date is 6.1% above the same period last year. At the time of the Budget in March, the Office for Budget Responsibility predicted that net borrowing would fall by more than 10% in the coming year. However, borrowing for the financial year to date is 6.1% above the same period last year.
The figures are the last before the chancellor delivers his Autumn Statement on 3 December. The borrowing figures are the last before the chancellor delivers his Autumn Statement on 3 December.
While the borrowing figure for October was slightly better than analysts' expectations, economists warned Mr Osborne was unlikely to meet his targets. While October's figure was slightly better than analysts' expectations of £7.9bn, Howard Archer, economist at IHS Global Insight, said it gave Mr Osborne a "limited boost".
"Despite October's improvement, the chancellor still looks hugely challenged to meet his fiscal targets for 2014-15," said Howard Archer, economist at IHS Global Insight. "Despite October's improvement, the chancellor still looks hugely challenged to meet his fiscal targets for 2014-15," Mr Archer said.
"So while he will be able to trumpet the UK's ongoing healthy economic performance, particularly compared to Europe, he will almost certainly have to acknowledge that he is going to clearly under-shoot his fiscal targets for 2014-15.""So while he will be able to trumpet the UK's ongoing healthy economic performance, particularly compared to Europe, he will almost certainly have to acknowledge that he is going to clearly under-shoot his fiscal targets for 2014-15."
Total public sector net debt reached £1,449.2 billion, or 79.5% of GDP, last month, the ONS said. October's data showed receipts from income tax were £81.5bn, down £0.3bn on the same month last year, despite economic growth running at around 3%, and a surge in employment.
A proportion of the new jobs are low-paid or part-time, suggesting many of the new wages generated do not meet the £10,000 threshold for paying income tax.
Total public sector net debt was £1,449.2bn, or 79.5% of GDP, last month, the ONS said.
A Treasury spokesman said: "While today's public finance figures show borrowing is down this month compared to last year, the impact of the great recession is still being felt in our economy and the public finances.
"At the same time, we have to recognise that the UK is not immune to the problems being experienced in Europe and other parts of the world economy.
Chris Leslie MP, shadow chief secretary to the Treasury, said the ONS figures were a "damaging setback for George Osborne".
"As the OBR has said, stagnating wages and too many people in low-paid jobs are leading to more borrowing," he added.