Blow for the Exchequer as public borrowing hits record monthly high
Chancellor George Osborne was dealt a blow hours ahead of the Budget yesterday as official figures revealed a larger-than-expected surge in public borrowing last month.
The £15.2bn jump in February's net borrowing, excluding financial interventions such as bank bailouts, was a record for the month and compared with £8.9bn last year. The City had forecast a £7.9bn rise.
Total borrowing for the financial year to date is £110bn, the Office for National Statistics said, and with a month to go is £17bn away from the full-year target of £127bn. Last year, public borrowing in March was £17.95bn.
Many economists had predicted the Chancellor would undershoot the full-year target after the Government recorded its highest surplus for four years in January of £7.9bn.
Mr Osborne is under pressure to stick to his tough austerity measures after agencies Fitch and Moody's both put the UK's AAA credit rating on negative outlook.
A Treasury spokesman, who claimed the data shows the Government is "making progress" in cutting the deficit, said: "As expected, growth in departmental spending has increased towards the end of the fiscal year, bringing it closer to forecast, and income tax receipts were weak."
Government spending was 8% higher at £52.5bn in February, driven by an 11% surge in social benefits, the ONS said.
In a further blow to Mr Osborne, net borrowing for the first 10 months of the year was revised up by £1.3bn. Net debt now stands at £995bn, £5bn away from the £1 trillion mark, which was first broken in December before falling back in January.
The figures come shortly before the independent tax and spending watchdog, the Office for Budget Responsibility (OBR), is expected to reveal slightly lower borrowing forecasts for the years ahead than it did in November.
The Government's target for full spending in the current financial year