British state borrowing hits record high

British public borrowing soared in November to the highest monthly level since records began, official data showed Tuesday, sparking concern that the government could overshoot its annual target. The public sector net borrowing requirement leapt to 23.3 billion pounds (27.5 billion euros, 36.1 billion dollars) last month, the Office for National Statistics (ONS) said in a statement.
That beat the previous monthly record of 21.1 billion pounds that was set in December 2009 and was the highest level since monthly records began in 1993. The figure compared with borrowing of 17.4 billion in November 2009 and market expectations of 16.8 billion pounds, according to Dow Jones Newswires.
Economists said the "horrible" borrowing data would support Britain's coalition government as it implements the biggest public spending cuts in decades. "The public finances were truly horrible and much worse than expected in November," said IHS Global Insight economist Howard Archer. "This is dire news for Chancellor George Osborne to digest over Christmas and is likely to reinforce the government's belief that there must be no let up in the fiscal consolidation efforts."
Finance minister George Osborne, whose official title is Chancellor of the Exchequer, is seeking to slash the enormous deficit. Experts now predict that the government could overshoot its annual borrowing target of 148.5 billion pounds for the current financial year to March 2011. "November's UK public finances figures suggest that the recent stronger performance of the economy is having little positive impact on the fiscal position," said Capital Economics analyst Jonathan Loynes.
He added: "On this trend, borrowing will hit 155 billion pounds in 2010/2011 as a whole, some seven billion pounds above the Office for Budget Responsibility's latest forecast." An alternative measure of the deficit, the public sector net cash requirement, stood at 16.8 billion pounds in November, the ONS added. The PSNCR rose from a level of 14.8 billion pounds in the same month of last year.
A Treasury spokesman said that Tuesday's data illustrated why the government had taken major action to rein in spending and lift taxation. "November's borrowing figures show why the government has had to take decisive action to take Britain out of the financial danger zone," the spokesman said. "These outturns are also in line with the OBR's latest forecast for borrowing to fall by almost 10 billion pounds this year compared to last."