Public borrowing soars to £9 million in February

Mar 20 2009 by Alun Thorne, Birmingham Post

The UK plunged further into the red in February as public borrowing soared to £9 billion, official figures showed yesterday.

The record figure for the month brings borrowing in the 11 months of the financial year so far to £75.2 billion, also the highest since records began in 1993, the Office for National Statistics (ONS) said.

The worsening state of the public finances was driven by a fall of almost 10 per cent in Government tax receipts over the month compared to a year earlier as the recession tightens its grip.

VAT receipts in February were 31 per cent below last year, thanks to the slowing economy and the Government’s temporary VAT cut introduced late last year. A year ago net borrowing was £1.1 billion - just over a 10th of the figures. The £75.2 billion figure is more than three times higher than the £23 billion recorded a year ago.

The latest dire blow for the public finances means Chancellor Alistair Darling is virtually certain to exceed his net borrowing forecasts of £78 billion for the current financial year. Economists predict the figure could reach £90 billion or higher.