U.K.'s public sector net borrowing increased notably from a year ago level, while hitting a record value for the month of February, data from the Office for National Statistics showed Wednesday.
The public sector net borrowing, excluding interventions, was GBP 15.2 billion, which is GBP 6.3 billion higher than in February 2011, when net borrowing was GBP 8.9 billion. It was almost double the expectations for a net borrowing of GBP 8 billion.
"February's UK public finance figures are rather worse than the Chancellor would have hoped for ahead of his Budget this afternoon," Vicky Redwood, chief UK economist at Capital Economics, said.
Growth of tax receipts slowed and, after underspending for the rest of the financial year, departments appear to have had a final splurge, the economist pointed out.
Chancellor George Osborne will present the 2012 budget at 12.30 pm, setting out the government's plans for the economy and the public finances in the year ahead.
Weak economic prospects and high indebtedness have put UK's AAA rating under pressure. Recently, Fitch Ratings and Moody's Investors Service have downgraded the sovereign's debt outlook to 'negative.'
Public sector net borrowing, including intervention was GBP 12.9 billion. This was GBP 6.8 billion higher than last year, when net borrowing was GBP 6.1 billion. This compares to economists expectation for GBP 5 billion in borrowing.
Excluding financial interventions, the public sector current budget was in deficit by GBP 11.1 billion, which was a GBP 6.7 billion higher a GBP 4.3 billion deficit recorded last year.
Public sector net debt at the end of February was GBP 995 billion or 63.1 percent of GDP. This compares to GBP 877.3 billion or 58.8 percent of GDP at the end of February 2011. The public sector net cash requirement (PSNCR) came in at -GBP7.8 billion, compared to -GBP2.4 billion last year.
by RTT Staff Writer
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