Business

UK borrowing falls in September

Plans to cut the amount the UK borrows are central to Chancellor George Osborne's policies
Image caption Plans to cut the amount the UK borrows are central to Chancellor George Osborne's policies

Government borrowing fell in September, official figures show, helped by higher tax revenues.

Public sector net borrowing, excluding the cost of interventions such as bank bailouts, was £11.1bn, the Office for National Statistics (ONS) said.

The figure is lower than the £12.1bn recorded in September 2012.

The UK's net public debt pile stands at £1.21 trillion, which is equivalent to 75.9% of GDP.

The government is aiming for a deficit of no more than £120bn this year, excluding the effect of cash transfers from Royal Mail and the Bank of England.

For the first half of the current tax year, the deficit on this measure totalled £56.7bn, down more than 9% compared with the same period a year previously.

Total cash receipts between April and September rose to £265.3bn, up from £237bn a year earlier.

'Difficult decisions'

Efforts to reduce UK borrowing and cut the country's debts are central to the government's economic policies.

Chancellor George Osborne has said that a re-elected Conservative government would aim to wipe out Britain's budget deficit altogether by 2020.

Speaking at at a Thomson Reuters event, Mr Osborne warned the UK's problems weren't over.

"An improving economic situation in the UK does not automatically lead to a windfall for the public finances... we are going to go on as a government having to take very difficult decisions to control public spending and make sure we are on top of the deficit."

Howard Archer, chief UK and European economist at IHS Global Insight, said the figures put the government on track for the full year.

"The hope is that the trend in the public finances will increasingly improve over the coming months as improved economic activity increasingly feeds through to boost tax revenues and help limit benefit payments," he added.

However, Chris Leslie MP, Labour's shadow chief secretary to the Treasury, said the government's deficit plan was "way off track".

"Three years of flatlining growth and falling living standards mean George Osborne is set to break his promise to balance the books by 2015. He's forecast to borrow over £200bn more than planned simply to pay for the costs of his economic failure."

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