x Abu Dhabi, UAEFriday 28 July 2017

UK public borrowing hits record high in November

Britain's public sector net borrowing hit a record monthly high in November, taking total outstanding net debt to 60.2 per cent of economic output.

LONDON // Britain's public sector net borrowing hit a record monthly high in November, taking total outstanding net debt to 60.2 per cent of economic output, official data showed yesterday. However, in a sign that the snowballing deterioration in Britain's public finances may be starting to ease, monthly tax receipts showed a year-on-year rose for the first time since September 2008. The Office for National Statistics reported that public sector net borrowing rose to £20.31 billion (Dh120.84bn) last month, well over the more comparable £15.45bn figure for last November. Borrowing since the start of the fiscal year in April is now £117.29bn compared with £57.00bn for the same period in 2008. Total debt is now more than £844bn, the highest since modern records began in 1974.

"The UK's public finances have deteriorated further in November but not as badly as the market had feared," said James Knightley, an economist at ING. "Certainly the better labour market data is helping the government finances and return to growth will help moderate the rate of deterioration. However, the deficit is still likely to exceed 13 per cent of GDP this fiscal year." The number of Britons claiming unemployment benefit unexpectedly fell in November, and most economists expect the economy to grow in the final quarter.

Total receipts last month were £30.60bn, up from 29.54bn in November last year, with year-on-year rises in all main revenue sources except income tax and national insurance payments. Other figures yesterday were less encouraging on the economy. Bank of England data showed the flow of lending to British businesses fell for the ninth straight month in October as firms continued to pay down debt, and the Council of Mortgage Lenders said gross mortgage lending fell 14 per cent year-on-year.

* Reuters