LONDON, Nov 21 — The British government’s year-to-date borrowing undershot forecasts despite a jump in October, official data showed today, boosting finance minister Jeremy Hunt on the eve of a key budget update.
Public sector net borrowing reached £98.3 billion (RM573 billion) in the seven months to October, the Office for National Statistics (ONS) said in a statement.
That was less than the £115.2 billion forecast by fiscal watchdog the Office for Budget Responsibility (OBR) but was £21.9 billion more than the same period a year earlier.
The ONS also revealed that borrowing hit £14.9 billion in October, up £4.4 billion from a year earlier on rising benefit and interest payments.
That was the second-highest October borrowing since monthly records began in 1993 and overshot the OBR forecast of £13.7 billion.
Chancellor of the Exchequer Hunt’s budget update, or Autumn Statement, is due tomorrow and could determine his Conservative government’s chances of re-election — or the size of its defeat.
The party is lagging badly in the polls before a general election expected next year.
“October’s public finances figures won’t deter the chancellor from embarking on a pre-election fiscal giveaway,” said Capital Economics analyst Ruth Gregory.
“Cumulative borrowing in the first seven months of the fiscal year is still £16.9 billion lower than the OBR expected at this stage.”
The ONS added today that public sector net debt totalled £2.64 trillion at the end of October, or about 97.8 per cent of Britain’s annual gross domestic product.
That was 2.3 percentage points higher than a year earlier and remains at levels last seen in the early 1960s.
“October’s figures provide a timely reminder that the task of restoring the public finances to a sustainable footing is far from complete,” cautioned Pantheon Macroeconomics analyst Samuel Tombs.
Britain’s Conservative government, headed by Prime Minister Rishi Sunak, hopes that tomorrow’s fiscal plans will narrow the gap with the main opposition Labour party, which is led by Keir Starmer.
Sunak was buoyed last week by news that UK inflation slowed sharply to 4.6 per cent in October, down from 10.1 per cent in January.
Yet the rate remains the highest of the G7 world’s richest nations, with Britain blighted by a cost-of-living crisis.
“We met our pledge to halve inflation but we must keep on supporting the Bank of England to drive inflation down to 2.0 per cent,” Hunt said in response to today’s data.
“That means being responsible with the nation’s finances.
“At my Autumn Statement tomorrow, I will focus on how we boost business investment and get people back into work to deliver the growth our country needs.” — AFP