Britain’s public finances are failing to improve as quickly as the chancellor had hoped, piling pressure on him to unveil further austerity measures to meet his future borrowing targets.
Excluding bank bailouts, public sector net borrowing was £14.2 billion in November, up £1.3 billion from the same month a year earlier, according to the Office for National Statistics.
This was higher than the £11.9 billion analysts had pencilled in and left borrowing for the fiscal year so far at £66.9 billion. Debt was £1.53 trillion, up £71.9 billion from a year ago.
While borrowing for the year so far was below the £73.4 billion recorded at the same point last year, the Office for Budget Responsibility, the chancellor’s independent fiscal watchdog, expects borrowing to be £68.9 billion over this fiscal year as a whole.
Economists warned that it now looks extremely unlikely that this target will be met, making it more difficult for George Osborne to meet his goal of turning Britain’s budget deficit into a surplus by the end of the decade.
Paul Hollingsworth, UK economist at Capital Economics, said: “There was no festive cheer for the Chancellor in November’s UK public finances figures. Indeed, it now looks almost impossible for Mr Osborne to meet the OBR’s forecast for the fiscal year as a whole.”
He added that borrowing for 2015/16 as a whole could come in at around £81 billion if this trend continues.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “The public finances are still not improving as quickly as the chancellor anticipates, raising the prospect that he will have to announce additional austerity measures to achieve his goal of budget surplus by the end of this parliament.”
The figures followed gloomy trade figures earlier this month, which raised fears over Britain’s growth in the final three months of the year.
The deficit in trade in goods and services with the rest of the world widened to £4.1 billion in October, £3.1 billion more than in September. This was driven by a 1.6 per cent fall in exports, while imports rose by a 5.4 per cent to reflect Christmas deliveries.
The government had hoped that trade would boost growth in the final three months of the year after it weighed heavily on the economy in the third quarter because of the strong pound and weaker global growth.