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Government borrowing ballooned to nearly £80 billion in the first six months of the year — a staggering £425 million a day.
And it paid a whopping £63 million a day in interest on the debt in the first half of the year.
Official figures today showed public sector net borrowing more than doubled from £33.8 billion in the first half of last year (April to September) to £77.3 billion this time around.
The borrowing binge — which included £14.8 billion last month alone — came as the recession more than decimated tax receipts and forced the Government to increase spending on benefits for the unemployed.
Tax receipts fell more than 10% in the first six months to £219.1 billion while spending jumped nearly 5% to £279 billion.
“Today's statistics only confirm what a sorry state the public finances are in,” said Hetal Mehta, senior economic adviser to the Ernst & Young Item Club. Peter Dixon of Commerzbank said: “They're not good numbers. But I suppose we should be thankful they're not actually worse.”
Government debt stood at £824.8 billion, or 59% of gross domestic product, at the end of September, up from £514 billion, or 36%, two years ago. The Lib-Dem's Treasury spokesman Vince Cable said: “With public borrowing continuing to soar the Government needs a credible plan to restore the health of the public finances.”
It rekindled debate in the City and Westminster over whether Chancellor Alistair Darling will hit his borrowing forecast of £175 billion for the full year to the end of March next year.
Vicky Redwood of Capital Economics said borrowing will top £200 billion.
But Philip Shaw of Investec said borrowing was on track to hit £172 billion this year.
“You can't call these figures good,” said Shaw, “but they could be worse.”
Liam Byrne, chief secretary to the Treasury, said the figures were “broadly in line with our forecast”.
Reader views (4)
General comments- putting income tax up 7pence in the pound will not solve anything, the government will just waste it on salaries and expenses.
If it was going to a specific thing, then fine.
Also removing OAP fuel allowance is practical.
Perhaps raising the Old Age Pension .and do away
with Pension Credits. There is a lot of money left at the end of the year which is not claimed, why not give it in the first place.
- Pauline Hopkins, Walton on Thames, 21/10/2009 14:45
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Buying a luxury house, a 1st class car, going to trendy restaurants, consuming fine wines, without spending a single penny of your own can make you feel and appear to be thriving. That trend ended in bankrupt.
Like people it seems to be what the government was doing at the times of prosperity it claimed and marvelled the nation. Borrowing money for the sake of appearance.
Now, using loads of public money to secure reckless bankers without imposing any rules or restrictions as if it was a mortgage lender for free spenders make us wonder if that money really existed or if it was simply borrowed to be lent.
It is lacking transparency in those accounts.
- E., London, 20/10/2009 20:59
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There is no problem here; we can print billions more everyday, its only money, and like toilet paper, we just make more when its needed.
- Mickinlondon, london, 20/10/2009 16:43
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I would like to know by what measure Liam B defines "broadly in line" - more govt spin meaning "I havent a scooby if we are on target"
- Wallytrader, London, 20/10/2009 13:23
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