A bit more on borrowing less

George Osborne George Osborne has a busy week ahead of him

True to form, the borrowing numbers have changed again with the release of the March public finance figures - the last set of monthly numbers for the 2012-13 financial year. And this time the revision has been in a helpful direction for George Osborne.

I pointed out yesterday that revisions had already eliminated the £100m fall in the chancellor's preferred measure of borrowing between 2011-12 and 2012-13.

I also noted that the figures were likely to change again today - and though his critics would be hoping the numbers would go up, it was perfectly possible, on past experience that this year's borrowing would be revised down.

That's what has happened. The new figures show borrowing in 2012-13 (excluding transfers from the Bank of England and the Royal Mail) will be £120.6bn, slightly below the Budget forecast of £120.9bn. So borrowing last year was not £100m lower than the year before but a heady £300m lower - a difference of roughly 0.02% of Britain's GDP.

So the chancellor's fans will say: "I told you so." And most economists will say: "So what?"

Two things worth remembering: first, these figures, too, will change.

The March numbers are especially subject to revision, because most government departments and local authorities don't really know, yet, exactly how much they spent in 2012-13. There's a huge amount of guesswork involved. Which is one reason why the 2011-12 borrowing figure has fallen by more than £5bn in the past 12 months.

The borrowing figure for the last year of the Labour government, 2009-10, fell by a similar amount, just between Alistair Darling's last Budget in spring 2010 and George Osborne's first.

The other point is that even if borrowing is very slightly lower than it was in 2011-12, it is still a great deal higher than the Chancellor planned back in 2010. The 2012-13 borrowing forecast built into his first Budget was £89bn.

Stephanie Flanders Article written by Stephanie Flanders Stephanie Flanders Former economics editor

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  • rate this

    Comment number 148.

    I support the view that Stephanie Flanderers who suggests "The other point is that even if borrowing is very slightly lower than it was in 2011-12, it is still a great deal higher than the Chancellor planned back in 2010. The Chancellor appears to be [off track] regarding the level of borrowing. The economy has hit the buffers several times and he has no answer.

  • rate this

    Comment number 147.

    And. Government revenue = £600 Bn. Government spending = £700Bn. So an anual overspend of £100 Bn ( 120 actually) Benefit spending £200 Bn. 94% of that is pensions child benefit and low paid workers. So about 6% goes to unemployed (despit Osboumes garbage). So how much growth needed ? about 3% or 1 % for three years. But world market in recession. That is THE problem. Balance of trade stuffed.

  • rate this

    Comment number 146.

    Sorry that should read £1.18 trillion debt.

  • rate this

    Comment number 145.

    144 Well presumably its 2% of £1.8 trillion Per annum.
    which is err £20 billion per annum. So its the intrest rate that gets you. Hence Spain stuffed a 7%

  • rate this

    Comment number 144.

    What is interestig (pun intended) about our current economig growth trajectory is the amount of growth required to generate revenue that will pay the interest on sums already borrowed and the more to come. I would like to know these numbers but accept that Pi gets in the way.


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