Public borrowing hits record £152bn

Annual public borrowing is at the highest level since records began
12 April 2012

Annual public borrowing figures came in lower than the Chancellor's forecast, but the UK's £163.4 billion plunge into the red was still the worst since records began.

The total for the year to the end of March - excluding the temporary effects of Government financial intervention - fell short of Alistair Darling's £167 billion Budget forecast and was comfortably below his original £178 billion estimate.

While the Government said the result confirmed the success of its actions to help the economy, one expert said the undershoot could reignite the debate over the need for next year's planned National Insurance hike.

And the public finance figures were still the worst since at least the Second World War, confirming the magnitude of the task ahead for whoever forms a government following the General Election.

The Office for National Statistics (ONS) said Britain added another £35.5 billion in public sector net borrowing last month, according to the Government's preferred measure.

With the inclusion of financial intervention outlays and benefits - such as fees received by Royal Bank of Scotland for the toxic asset protection scheme - annual public borrowing hit £152.8 billion, up from £86.9 billion in 2008/09.

This saw net debt soar to £890 billion in 2009/10 - a record 62% of gross domestic product (GDP).

The budget deficit widened by £14.8 billion in March to take the gaping hole in public finances to an all-time record of £107.6 billion over the financial year, more than double the £49.7 billion recorded a year earlier.

Borrowing has soared amid the recession as unemployment and Government spending to prop up the economy have taken their toll.

However, there were signs of further improvement in the figures. Total tax receipts rose 3.8% in March, having now increased in four out of the last five months. VAT receipts lifted after the rate reverted back to 17.5% in January as the Government's temporary reduction ended, while corporation tax increased by a hefty 51.4%.

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