October worst for United Kingdom public finances in 6 years

According to the Office for National Statistics, UK’s headline public borrowing rose to £8.2bn last month from £7.1bn in the corresponding period in 2014, exceeding forecasts for a £6bn reading.

He said: “Barring revisions, borrowing would have to be an implausible 48% lower year-over-year in the second half of this fiscal year in order for the current official forecast to be met”.

This suggests Mr. Osborne, the Chancellor of the Exchequer, will struggle to keep his self-imposed commitment to reduce government borrowing to zero by 2020.

The new data is expected to prompt the Office for Budget Responsibility to raise its forecast for government borrowing this fiscal year at next week’s Autumn Statement.

“This is even allowing for the fact that the public finances can be volatile from month to month and can be revised significantly”.

Until late past year, strong economic growth had failed to translate into much of an increase in tax revenues, but since then, an increase in the number of people in work and a gradual pick-up in wages have boosted revenue.

While government coffers usually record a hefty surplus in January that would be able to bring borrowing numbers down again, analysts still foresee the OBR will raise its estimate for this fiscal year’s budget deficit.

John Hawksworth, PwC’s chief economist, said the borrowing figures were “a little disappointing for the Chancellor”.

Mr Osborne was forced to delay his programme of cuts – pending changes to improve support the poorest – after the plans were defeated by the House of Lords. “His modified plans should be at the heart of the Autumn Statement”. Excluding this source of income, government revenue rose 1.4 percent.

The Treasury said the figures showed the job of rebalancing the economy was “not yet done”.