April sees worst UK public sector borrowing on record

News Article - 31 May 2011
Category: Business

The UK witnessed its worst April public sector net borrowing on record as tax receipts dropped, according to the Office for National Statistics (ONS).

The total public borrowing figure, excluding interventions such as bank bail-outs reached £10 billion compared with £7.3 billion the previous year.

The figure was around £3.5 billion higher than many analysts had expected with earlier predictions of public borrowing at around £6.5 billion.

David Kern, chief economist at the British Chambers of Commerce, believed the figures showed the difficulties the Government faces in reducing the overall deficit.

"The fragility of the economic recovery is creating a difficult backdrop, but the Government must not deviate from its strategy to restore stability in the UK's public finances.

"Businesses support the measures being taken to reduce the deficit, and the emphasis should be on spending cuts rather than tax increases," Mr Kern said.

Although the first set of figures for 2011 show record levels of public sector borrowing it is hoped the trend in borrowing will improve over the course of the year as further planned spending cuts come to fruition from the Coalition Government.

The Government will have been encouraged by the news that borrowing figures for the year to March 2011 had to be revised down to £139.4 billion from £141.1 billion.

However, the higher-than-expected public borrowing levels in April have pushed the Government's overall debt to an eye-watering £910.1 billion - 60.1 per cent of the GDP.

While on the face of it record-high figures of public sector borrowing contradicts the deficit reduction programme. But there is genuine confidence that the Government can reduce the deficit with sustainable spending cuts rather than further tax increases.

A spokesman for HM Treasury said: "One-off factors affected borrowing, but it is clear from the downward revision to last year's borrowing figures that the Government's deficit reduction strategy is making headway in dealing with our unsustainable deficit.

Article keywords: Public sector, Office for National Statistics, ONS, public borrowing, David Kern, British Chambers of Commerce, Coalition Government, HM Treasury

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