Belfast Telegraph

Thursday 17 April 2014

Surprise as UK borrows for the very first time in January

The UK’s pressured finances suffered another blow last month as the public sector borrowed in January for the first time on record, official figures showed today.

Net borrowing was £4.3bn in a month that usually sees a seasonal surplus thanks to income and corporation tax, the Office for National Statistics (ONS) said.

It is the first borrowing figure for a January since records began in 1993 and is likely to surprise economists who had predicted a repayment of £1bn.

And for the 10 months of the financial year so far, public sector net borrowing has reached £122.4bn.

The figures reflected the impact of the economic downturn on the UK’s finances as tax revenues slumped while spending on measures such as jobseeker’s allowance grew. It compares to a £5.3bn repayment in the same month last year.

The ONS said spending was £4.4bn higher than in January 2009, while receipts were down £4.2bn.

The UK's net debt hit £848.5bn, which is equivalent to 59.9% of the country's annual output.

Today’s data will renew pressure on the Government to set out plans to ease the burden on public finances, with many predicting a future of tax rises and spending cuts.