Public borrowing down £14bn on last year

22 Mar 16

Public sector borrowing is £14bn lower in the eleven months of the financial year to date compared to 2014/15, according to the latest figures from the Office for National Statistics, with the government set to borrow £72.2bn in the year.

The ONS reported today that public sector net borrowing, excluding the bailed out banks, decreased by around £500m to £7.1bn in February, compared to the same month in 2015.

Overall borrowing for the first 11 months of the year is £70.7bn, and the Treasury should borrow £72.2bn according to the forecast set out by the Office for Budget Responsibility in last week’s Budget.

Responding to the figures, the Centre for Economics and Business Research said events around the Budget, including the resignation of Iain Duncan Smith and reversal of proposed cuts to Personal Independence Payment, showed there were very few opportunities left for George Osborne to get the deficit down.

“Osborne has also grasped that cutting long-term investment such as infrastructure is ultimately self-defeating as it reduces long-term growth prospects,” senior economist Alasdair Cavalla stated.

“Given the multiple constraints on the chancellor, and the real uncertainty associated with the assumptions underlying fiscal consolidation, CEBR judges achieving the fiscal mandate as highly unlikely. We expect a deficit of around £30bn in 2019/20 [compared to the chancellor’s aim for a £10.4bn surplus].”

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