Connect to share and comment

Britain's state borrowing rises in February

PlacardEnlarge
(Globalpost/GlobalPost)

British state borrowing worsened in February, official data showed Friday, but the government remains on track to meet the new deficit target unveiled earlier this week.

Public sector net borrowing, the government's preferred measure of the deficit, rose to £9.3 billion ($15.3 billion, 11.1 billion euros) in February.

That compared with £6.5 billion in the same month of 2013, the Office for National Statistics (ONS) said in a statement. Market expectations had been for borrowing of about £8.8 billion.

Last year's February borrowing was skewed by a one-off windfall from 4G mobile licences as well as interest earned from the Bank of England's quantitative easing programme of asset purchases.

However, analysts said Friday's data left the government on course to meet its annual borrowing target of £108 billion for the 2013/2014 financial year that runs from April until March.

The latest official target, unveiled by British finance minister George Osborne in his annual budget on Wednesday, was less than previous borrowing forecast of £111 billion.

However, the ONS added on Friday that underlying public sector debt was £1.2468 trillion, or 74.7 percent of gross domestic product (GDP) at the end of February 2014.

That marked an increase on 72.5 percent at the same time last year, and was also up on last month's reading of 74.6 percent.

"February's public finances figures confirm that the UK's budget deficit is continuing to make slow downward progress," said Jonathan Loynes, chief European economist at Capital Economics.

Loynes added that if March borrowing was the same as last year, the government would meet the target.

But he added: "The big picture is still that there is a very long way to go before the public finances are restored to full health."

Osborne had also revealed on Wednesday that the government expects to wipe out its annual budget deficit by the end of the decade.

After the current financial year, state borrowing was then forecast to drop to £95 billion in 2014/2015, followed by £75 billion, £44 billion and £17 billion in subsequent financial years, with a surplus of almost £5 billion expected in 2018/2019.

rfj/bcp/ric

http://www.globalpost.com/dispatch/news/afp/140321/britains-state-borrowing-rises-february