Public Sector Net Borrowing Falls To £12.8bn

Written By Unknown on Jumat, 19 Oktober 2012 | 16.01

Public sector net borrowing falls to £12.8bn in September - the lowest figure for the month since 2008.

The official data, which excludes financial interventions like bank bailouts, is £0.7bn lower than in September last year.

The improvement was driven by a 4.5% fall in central government net investment to £2.4bn, which includes the purchase and sale of assets like buildings and vehicles.

The data makes it more likely that Chancellor George Osborne will miss his deficit reduction goal for the current tax year - set by the Office for Budget Responsibility in March at £120bn.

But the Government will continue to come under pressure as its total expenditure rose 3.7% to £52.5bn, including a 1.6% rise in social benefits, such as unemployment claims.

Alan Clarke, an economist at Scotiabank, described the figures as a "welcome surprise."

"The double whammy of better-than-expected figures this month couple with a revision to the previous month meant it was about two billion pounds better-than-expected, so that's good news," he said.

"Particularly after such a bad start to the fiscal year, it really confirms that it would have been wrong to extrapolate all the bad news and suggest it's going to continue.

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