The UK Government borrowed more this August than at any time in the country’s history
When we wrote last week that there hadn’t been any austerity we really meant it. Today we got full justification for such a statement as the OBR reported that the UK borrowed more this August than any other August in the history of the country.
Yes, you read that correctly, for all the nonsense about the UK ‘slashing spending’ and ‘slashing the deficit’ this ‘so-called’ austere government actually borrowed more in august than any other government in the history of the UK.
From the report:
For measures excluding financial interventions:
the public sector current budget was in deficit by £13.8 billion; this is a £2.3 billion higher deficit than in August 2010, when there was a deficit of £11.6 billion;
public sector net borrowing was £15.9 billion; this is £1.9 billion higher net borrowing than in August 2010, when net borrowing was £14.0 billion;
public sector net debt at the end of August 2011 was £944.5 billion (61.4 per cent of GDP). This compares to £810.5 billion (55.3 per cent of GDP) at the end of August 2010;
The central government net cash requirement was £10.7 billion, a £4.9 billion higher net cash requirement than in August 2010, when there was a net cash requirement of £5.8 billion.
That £15.9bn net borrowing for the month of August is a record for the month.
Good to see that the OBR forecast is on track for a wild miss.
So let’s get this right, we’re meant to be experiencing austerity in the UK but this government has increased the debt by 6.1% of GDP in one year?
But what about when you include all those financial interventions. Or as well call it round these parts, the ‘real’ debt?
For measures including interventions:
the public sector current budget was in deficit by £11.1 billion; this is £1.6 billion higher deficit than in August 2010, when there was a deficit of £9.5 billion;
public sector net borrowing was £13.2 billion; this is £1.3 billion higher net borrowing than in August 2010, when net borrowing was £11.9 billion;
Office for National Statistics | 9Public Sector Finances August 2011 | 21 September 2011 public sector net debt at the end of August 2011 was £2258.8 billion (146.9 per cent of GDP).
That’s right, the ‘real’ debt of the UK is actually 146.9% of GDP. Down on last year but after the poor GDP prints and falling revenue look for this number to spike back above the record 151% before the end of the financial year.
Basically Osborne has boxed himself into a corner, he’s tried to pretend that he was cutting spending when he wasn’t and forecasted using wildly over-optimistic GDP and tax revenue numbers because of a poor understanding if simple economics.
In the end Osborne will have to fess-up to this reality in his Autumn statement to parliament in November and come clean that his projections for deficit reduction are in tatters – we guess that’s what happens when you say one thing but actually do another.
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