The Treasury borrowed a record £10.4 billion last month – far exceeding previous forecasts. In total, borrowing has risen by 70 per cent during the past five months.
The figures come amid growing fears over the health of public finances as the fallout from the credit crisis and stock market turmoil continues.
The Chancellor is now expected to break the Government\’s rules on how much it is supposed to borrow this year.
He previously predicted that total public borrowing would be £43 billion this financial year – but the Government has already borrowed £28.2 billion in five months.
The increase in borrowing has occurred after a fall in the amount of money expected to be raised from taxes as a result of the economic slowdown. The Government has also had to borrow money to fund a number of emergency measures, including the payment of compensation to those who lost money from the loss of the 10p income tax band.
I think we all rather knew this was going to happen? By not socking money away in the good times (even if it wasn\’t socked away, at least the structural deficit could have been reduced) now the bad times are here we\’re going to see borrowing soar.
Wouldn\’t be at all surprised to see it go over £100 billion in the next year or two.
But it was worth it. Our NHS is the envy of the world, all our children leave school veritable geniuses, crime is a distance memory, and our political leaders have never been so respected.
Would ‘socking’ it away just have taken a load of money out of circulation and so caused other problems?
If you believe Keynes then taking money out of circulation would have caused problems. If you agree with von Mises, the problems have in fact been caused by unchecked money creation. Austrian economics predicted the current mess.
Quite, Mr. Suttie. And the greater ones to come, come to think on it.