Government borrowing rises again
By Vivienne Russell | 22 January 2013
Public sector borrowing in the UK continued to increase last month, the Office for National Statistics confirmed today.
Public borrowing in December 2012 was £15.4bn, compared with £14.8bn the previous December.
Between April and December, borrowing totalled £106.5bn, £7.2bn higher than in the same period the previous year.
There was also a slight rise in the current budget deficit, up to £13bn in December 2012 from £12.5bn in December 2011.
Public sector net debt was £1,111.4bn at the end of December 2012, equivalent to 70.7% of gross domestic product.
David Kern, chief economist at the British Chambers of Commerce, said the figures highlighted the continued pressures on the government’s finances.
‘Clearly, Britain’s structural deficit remains unacceptably high,’ he said. ‘But the weakness of the economy reinforces the case for adhering to the deficit-cutting programme alongside new growth-enhancing policies. The chancellor is obviously facing serious challenges. To maintain confidence, he must persevere with real cuts in current spending and continue to prioritise capital investment.’
Kern said the March Budget should include measures to increase the supply potential of the economy.
‘This means supporting exports, construction and house building in the short term, and supplementing this with effective medium-term initiatives that will encourage private sector investment in infrastructure projects.’
Unison general secretary Dave Prentis warned that a ‘triple-dip’ recession was beckoning. ‘The Tory-led coalition’s austerity agenda is all pain and no gain. Young people are struggling and working families are facing poverty as they lose much-needed benefits,’ he said.
‘We need a new plan to get Britain back to work and to give people back hope for the future.’