King's Debt Excuse As Borrowing Disappoints
Figures show the Government's annual borrowing target is under further pressure amid comments from the Governor of the Bank of England that a weak world economy would excuse a relaxation in debt reduction.
Public sector net borrowing, excluding financial interventions such as bank bailouts, hit £14.41bn in August - the highest figure for the month on record.
The weak figures, although not as bad as some had forecast, signal more trouble for the Chancellor George Osborne who wants to trim borrowing in 2012/2013 to £120bn from £127.6bn last year.
The Office for National Statistics said a lack of corporation tax receipts - a consequence of recession and the sluggish recovery - continued while higher benefit spending also kept pressure on Government expenditure.
In July, total year-to-date Government borrowing was already more than £9bn higher than in the same month the previous year, if the transfer of Royal Mail pension assets is stripped out.
It has added to speculation that Mr Osborne will use his autumn statement in December to admit either that he will be unable to start bringing down debt as a percentage of GDP by 2015/16 or announce further austerity measures.
In a TV interview on Thursday night Sir Mervyn King appeared to sympathise with the Government's predicament on debt reduction - plans he largely supported ahead of the last election.
He told Channel 4 News that if there was a genuine excuse for being unable to lower the UK's debt, the Treasury could ditch the coalition's pledge and allow debt to keep rising in three years' time.
He said: "If it's because the world economy has grown slowly, so we in turn have grown slowly, then it would be acceptable to be in that position.
"But if the world economy were to pick up and we could grow quite quickly then it would be not acceptable to miss it if we had no real excuse for it."
The Government's deficit reduction plans are said by its critics to be harming economic recovery as the UK struggles to escape recession.
Labour accuses ministers of hiding behind the eurozone debt crisis and world slowdown and damaging recovery by cutting 'too far and too fast.'
The Treasury reacted to today's borrowing numbers by saying they demonstrated the UK is dealing with its debts and that "we should not second guess" what the Office for Budget Responsibility will project on UK borrowing targets.
what do you think?
all you fat cats in the city investment jobs, top banking jobs have got to get used to pay cuts like all us normal working people have had to, face it your a big part of the problem !!
Sorry Keith but this is media hype most of those so called 'fat cats' have skills which net far more than their pay and to get the best you have to match the industrial standard. That said I am not sure all are quite what they appear. More accurate to say we are in a global market and one of them sneezes and we all get a cold but then that old fashioned protectionism kicks in. We lack a re-think and a more positive stand to release the noose that is holding us back.
Noooo-one could have foreseen this, what a surprise, well to government it is. After 13 years of a debt ponzi driven economy, anyone in their right mind who thought that a country carrying the public sector debt and costs was going to be able to just muddle along into better times is a fool. This country requires a complete "re-set" to focus on earning a living instead of believing you can spend our way out of debt. Canada did it by a grown-up dialogue with the populace of cutting back drastically on State expenditure. It's simple - if we can't afford it, we can't have it.
you can if your rich with that big tax brake
In 2010 Osborne said that our deficit would be removed in 2015 but now he has borrowed more money in 2 1/2 years than Labour did in 13 years and he is borrowing more to give it to millionaires and dictators, and civil servants etc.
You just can't yourself, can you? Borrowing money to "give to civil servants"? Where do you get this lying cr@p from?
......THE PROBLEM IS THAT ALL OUR MANUFACTURING HAS GONE TO CHINA,GERMANY.......I LIVE NEAR A TOWN WHICH MADE FURNITURE....THERE IS NOT ONE FACTORY NOW......SO AS TIME GOES BY, TAXES HAVE TO INCREASE ON THE WORKERS, ITS A SPIRAL DOWNWARDS.....TAXES HAVE TO BE LOWERED,WELFARE REDUCED, INVESTMENT ENCOURAGED....AND YOU CANT BORROW MONEY TO SPEND.....THATS SILLY......
we borrowed money in 1945 too spend
We can all blame one or other political party or the so called 'fat cats' but the facts are there is a weak world market what we lack is a re-think on many areas. Keynesian economics hold as good today as they did 60 years ago but they need applying in a way which meets the nature of todays free market. Osbourn is trying to buck the system just as Brown did. Stuart Hartley makes reference to our manufacturing leaving the country and why - because base costs are too high. What do you want 10% of something or 100% of nothing? As for the smaller manufacturers let them look to models in Third Italy and at MITI in Japan.
Don't blame George, it's not his fault. It's everyone else's fault and anyway he didn't really want this job he wanted to be a train driver.
Osborne has borrowed more money in 3 years than labour did in 13. You have destroyed the private pensions and all yourQE has gone to 4 institutions who have given all of it to their bosses. 0.5% base rate is now destroying the economy