Public borrowing hits record high in September
19 October 2007
The Chancellor faces criticism this week after official figures revealed that public sector borrowing hit £6.9billion last month – up from £5.7billion in September 2006.
Alistair Darling only announced his borrowing targets 10 days ago in his first Pre-Budget Report, where he predicted that public borrowing will rise to £38billion this year – an increase of £4billion on Gordon Brown’s prediction when he was Chancellor. Mr Darling also forecast that borrowing in 2008-09 will hit £36billion – up from the £30billion previously forecast.
But experts are predicting that the overshoot could be even worse due to the fact that the Chancellor has not the recent credit squeeze into account, and that the shortfall may have to be made up through a hike in taxes.
Howard Archer, chief UK economist at Global Insight told the Daily Mail: “We believe that the Chancellor's new public finance targets in the Pre-Budget Report are based on pretty optimistic growth forecasts and we have severe doubts if the target for 2008/09 can be met without corrective action further down the line."
Public sector debt has now reached nearly £517 billion, up from £488 billion this time last year, and spending is rising at a rate of 6.3 per cent.
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