Borrowing hits record highs

Official figures have shown that the UK´s public sector borrowing hit a new high of over £20.3bn
in November, 2009. This was the highest figure since records began in 1993, but was still less than economists expected.

The Office for National Statistics said that public sector net debt was £844.5bn, or 60.2% of overall UK economic output. Government debt has also risen considerably since the start of the financial crisis.

The Conservatives said the Government had allowed spending to get out of control, and the Shadow Chancellor, George Osbourne said: “In the run up to Christmas, Gordon Brown is maxing out on the nation´s credit card, and doesn´t care how he is going to repay these debts in the future. The record public borrowing figures equate to almost £1,000 for every family this month alone.”

Despite the record drop, experts had expected November´s debt to be much higher and although the UK´s public finances have deteriorated further in November, they could have been much worse.

Data released recently showed the increase in the UK unemployment rate has continued to slow down between August and October, and although securing growth is seen as key to paying down some of the burgeoning government debt, the UK is still stuck in recession at a time when other global economies are growing again.

The overall amount of public borrowing is on track to hit £178bn for this financial year and the Government has also said that the deficit could improve slightly when VAT returns to 17.5% in January, boosting government tax revenues that have slumped during the recession.

The Government has received less money and spent much more, mainly on bailing out the banks and trying to stimulate the UK economy. Despite a sharp increase in public borrowing however, overall debt levels are similar to those of other major developed economies.