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Borrowing rockets to £9bn

Highest in more than a decade

The UK plunged further into the red in February as public borrowing soared to £9 billion, official figures show.

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The record figure for the month brings borrowing in the 11 months of the financial year so far to £75.2 billion, also the highest since records began in 1993, the Office for National Statistics (ONS) said.

The worsening state of the public finances was driven by a fall of almost 10% in government tax receipts over the month compared to a year earlier as the recession tightens its grip.

VAT receipts in February were 31% below last year, thanks to the slowing economy and the government’s temporary VAT cut introduced late last year.

Total debt

The UK is now labouring under a debt burden of £717 billion, the figures showed, more than £100 billion above a year earlier.

Net debt as a proportion of GDP soared to 49% – another record – and even excluding the impact of financial sector bailouts, still stood at 40.7%, the highest since June 1998.

This leaves the sustainable investment rule of then-chancellor Gordon Brown – that net debt should never exceed 40% of output – an even dimmer memory as borrowing soars in recession.

Borrowing last year

A year ago net borrowing was £1.1 billion – just over a 10th of the current figures. 

The £75.2 billion figure is more than three times higher than the £23 billion recorded a year ago.

The latest dire blow for the public finances means chancellor Alistair Darling is virtually certain to exceed his net borrowing forecasts of £78 billion for the current financial year.

Economists predict the figure could reach £90 billion or higher.

Budget deficit

The data also showed the government running a current budget deficit during February for the first time since the ONS began collecting figures in 1998.

Total current tax receipts fell to £40.7 billion from £45.1 billion a year earlier, although spending rose by 6.5% to £43 billion.

This includes a rise of £1 billion in social benefits to £12.1 billion as unemployment – which topped the two million mark for the first time in a decade this week – continues to rise.


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