August ONS figures show higher spending, higher borrowing and soaring debt

September 22, 2011 4:40 PM

Public sector borrowing increased from £14 billion in August last year to £15.9 billion this year. The deterioration in the August figures raises further questions about whether the Coalition’s austerity plans are sufficient to repair the public finances.

In the 2011 Budget in March, the forecast for total borrowing in 2011-12 was £122 billion, 10 per cent lower than the £136.7 billion that was borrowed in 2010-11. But total borrowing over the April to August period was just 7 per cent lower than over the same period last year. With August’s borrowing figure 14 per cent higher than last year, it is looking doubtful whether the Government will be able to stick to its borrowing plans set against the backdrop of the spreading Eurozone debt crisis.

The root cause of August’s alarming borrowing figure will come as no surprise to those who pay attention to the numbers rather than the rhetoric about “cuts”. Spending in August was £3.5 billion higher than last year. And continued high spending and borrowing means the debt mountain has continued to soar, up from £810.5 billion at the end of August last year to £944.5 billion this year.

The numbers speak for themselves. The Government should cut spending to ensure it keeps within its already modest borrowing targets and avoid letting taxpayers becoming burdened with the expensive debt interest payments associated with governments that markets don’t trust to live within their taxpayers’ means.Public sector borrowing increased from £14 billion in August last year to £15.9 billion this year. The deterioration in the August figures raises further questions about whether the Coalition’s austerity plans are sufficient to repair the public finances.

In the 2011 Budget in March, the forecast for total borrowing in 2011-12 was £122 billion, 10 per cent lower than the £136.7 billion that was borrowed in 2010-11. But total borrowing over the April to August period was just 7 per cent lower than over the same period last year. With August’s borrowing figure 14 per cent higher than last year, it is looking doubtful whether the Government will be able to stick to its borrowing plans set against the backdrop of the spreading Eurozone debt crisis.

The root cause of August’s alarming borrowing figure will come as no surprise to those who pay attention to the numbers rather than the rhetoric about “cuts”. Spending in August was £3.5 billion higher than last year. And continued high spending and borrowing means the debt mountain has continued to soar, up from £810.5 billion at the end of August last year to £944.5 billion this year.

The numbers speak for themselves. The Government should cut spending to ensure it keeps within its already modest borrowing targets and avoid letting taxpayers becoming burdened with the expensive debt interest payments associated with governments that markets don’t trust to live within their taxpayers’ means.

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