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UK Public Borrowing Overshoots Forecasts in August

LONDON, Sept 21 (Reuters) - British public borrowing fell less sharply than expected in August and was its second-highest on record for the month, government figures showed on Tuesday, highlighting the hefty ongoing costs of the COVID-19 pandemic.

Public sector net borrowing, excluding state-controlled banks, totalled 20.5 billion pounds ($28.0 billion) in August, down 5.5 billion pounds from August a year earlier the Office for National Statistics said on Tuesday.

Economists polled by Reuters had on average forecast borrowing of 15.6 billion pounds for August.

British government borrowing soared last year due to heavy spending during the COVID-19 pandemic and hit its highest since World War Two as a share of the economy at 15.5% of gross domestic product, up from an earlier estimate of 14.2%.

Public debt as a share of gross domestic product totalled 2.023 trillion pounds or 97.6% of GDP in August, the highest ratio since March 1963.

Borrowing has fallen substantially during the current financial year but is still on track to be high by historic standards.

Finance minister Rishi Sunak will unveil new budget and growth forecasts on Oct. 27, as well as new multi-year spending limits for individual government departments and potentially some longer-term fiscal goals.

Last week the Financial Times reported that Sunak would set out a target of ending borrowing for day-to-day spending within three years, and also aim to ensure that a measure of underlying public debt started falling by the 2024/25 tax year.

Britain’s finance ministry said no decisions had been taken, beyond Sunak’s pre-existing goal of putting the public finances on a more sustainable footing.

($1 = 0.7317 pounds)

(Reporting by David Milliken and Andy Bruce)

Source: Reuters

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