UK Public Sector net borrowing was £14.4 billion in August 2012, coming out on par with August 2011 in comparison. The report released by the ONS said that the public sector current budget deficit was £13.2, higher by £0.4 to August last year. The UK’s public sector net debt was at £1,039.5 billion at the end of August 2012, equal to 66% of the GDP.
August’s figures come out slightly below the general consensus was estimated at £15 billion.
August’s PSNB reading showed a widening budget deficit against falling corporate tax reciepts and benefits spending continue to rise. As expected, it is unlikely that the UK Government will meet its debt reduction goals for this year.
PSNB, exclusing the financial sector intervention rose to £14.410 billion in August 2012, while August last year the PSNB was at £14.365 billion. The readings for August is considered to be the highest since the ONS start keeping records from 1993.
The current data takes the fiscal year borrowing to £31.003 billion down from £48.446 billion in the periods of April through August 2011.
The UK Government’s intention was to eliminate structural budget deficits by the year 2015 with a tough austerity plans of spending cuts and higher tax revenues. But this plan hasn’t really worked against a weak economy that has forced the UK government to extend austerity measures for much longer.
Critics widely blame Chancellor Osbornes austerity plans as being “too fast” as the Chancellor now faces the choice of either giving up on meeting the UK’s deficit or impose further austerity measures.
The report from ONS showed that government receipts increased by 1.8% for the year in August with a 2.5% growth in current spending. Corporate taxes dropped 2.1% for the year with the benefits spending increasing 4.9%.
To view the original report from ONS for PSNB August 2012, click here.
The Public Sector net borrowing is the amount of expenditures incurred by the UK minus the total receipts taken by the government. PSNB for short, is a measure of fiscal surplus and deficits including the amount of new debt that has been creating for the month. A positive number indicates an ongoing fiscal deficit while a negative number indicates a fiscal surplus.
To learn more about the UK’s budget deficit, read about the UK Budget deficit explained.