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Darling’s borrowing binge puts pound into a nosedive
21 Jul 2009The pound fell against the dollar and the euro today after another dramatic deterioration in the UK's public finances.
Sterling fell 1.13 cents against the greenback to $1.6433 and 0.75 cents against the single currency to €1.1553.
It came after official figures showed the Government borrowed another £13 billion last month — a record for June and more than £5000 a second or £433 million a day.
The borrowing pushed the nation's debt up to £798.8 billion — a record 56.6% of gross domestic product.
Chancellor Alistair Darling has pencilled in £175 billion of borrowing this year, but economists warn it could hit £200 billion as tax receipts collapse and benefit payments rise.
“The question mark over public finances remains a short-term negative for sterling,” said Jeremy Stretch of Rabobank International.
The astonishing levels of borrowing and debt have left households and businesses facing tax rises and public spending cuts following the general election expected next spring.
Corin Taylor, senior policy adviser at the Institute of Directors, said: “The Government will have to get serious about reducing the deficit as soon as the recovery takes hold. There will be few areas of public spending that can remain entirely immune from cuts — the risks to the country's solvency are too great.”
Reader views (4)
The Conservatives will cut public spending. That will mean hardship for those who least deserve it. The Banking Community have to be made to accept their responsibility in this appalling crisis. It is the ethical duty of the wealthy to protect those less fortunate. Well done Mr Brown
- Nick, Spalding, 21/07/2009 21:42
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All according to Brown's twisted mind plan. Run the economy into the ground. The Tories win the election and have to make swingeing cuts and tax increases. Enter Brown as Leader of the Opposition to tell everyone "I told you the Tories would introduce cuts and increase taxes." Job done.
- Albert Hall, hove england, 21/07/2009 18:10
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"These changes reverse themselves daily. So why worry about it ?
- Keith Price, Luton, England"
Spoken like a true union man and public sector worker.
Let's forget about
"It came after official figures showed the Government borrowed another £13 billion last month — a record for June and more than £5000 a second or £433 million a day.
The borrowing pushed the nation's debt up to £798.8 billion — a record 56.6% of gross domestic product.
"
"These changes reverse themselves daily. So why worry about it ?" Sop that's all right isn't it keith in your parallel universe?
- Sicof Morons, the real world, 21/07/2009 17:45
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These changes reverse themselves daily. So why worry about it ?
- Keith Price, Luton, England, 21/07/2009 16:43
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