20150922 Government borrowing edges up in August

Government borrowing was higher than expected in August, rising slightly from a year earlier.

Public sector net borrowing excluding banks was £12.1bn last month, which was £1.4bn higher than August 2014, the Office for National Statistics said.
Analysts had expected August’s borrowing figure to fall to about £9bn.
However, borrowing in the first five months of the financial year was £38.4bn, which is £4.4bn below the level at the same point last year.
Total debt was £1,506bn at the end of August – up £68.9bn on a year earlier.
The ONS blamed the rise in borrowing during August on a fall in income tax paid during the month, with fewer of the payments that were due in July being paid late than in previous years.
The corporation tax take in August was also down on the previous year.
But the ONS stressed that the monthly figures are volatile and that the figures for the financial year so far may provide a better picture.

‘More to do’
A Treasury spokesperson said: “Britain’s hard work is paying off with cumulative borrowing £4.4bn lower than at this point last year.”
“We have more than halved the deficit but there’s more to do with debt remaining higher than 80% of GDP.”
But Vicky Redwood from Capital Economics said the figures “bring the recent run of good news for the chancellor to an abrupt end”.
“The public sector net borrowing total of £12.1bn was significantly higher than the consensus forecast of £9.2bn.”
The Office for Budget Responsibility (OBR) forecast in July that the government would borrow £69.5bn in the current financial year, down from £89.2bn in the previous year.
“The government appears to be making slow progress in reducing the budget deficit,” said Ross Campbell from the Institute of Chartered Accountants in England and Wales.
“Sorting our public finances depends on robust tax receipts, so it is disappointing to see corporation and income tax revenues decrease.”
“The Spending Review in November is looking at expenditure, but it must also take into account what income can be recouped, or we risk turning deficit reduction into a three parliament problem.”