Borrowing Binge Piles on Pressure
Saturday, July 4, 2009 4:43
Official figures indicate that a record £19.9 billion borrowing binge piled more pressure on the public finances in May.
Public sector net borrowing now stands at £30.5 billion for the two months of the financial year so far, which is more than double the level seen at the same stage 12 months earlier. Chancellor Alistair Darling predicts that the net borrowing over the year as a whole will reach £175 billion.
Even though May is traditionally a weaker month for the public finances, the borrowing seen over the month surpasses March’s £19 billion and is the biggest figure ever since the Office for National Statistics’ records began in 1993. the country’s overall net debt now stands at a mammoth £774.8 billion. This is equivalent to 54.7% of UK’s entire annual economic output, which is the biggest for more than 30 years.
Meanwhile, governement spending on social benefits rose 8% to £13.5, reflecting higher unemployment payouts. Figures showed that unemployment hitting a 12-year high of 2.26 million.
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