–Sep PSNB Stg15.607bn vs Stg14.806bn in Sep 09; median Stg14.0bn
–Sep PSNB ex financial interventions Stg16.166bn; median Stg15.9bn
–Sep PSNCR Stg20.736bn vs Stg19.18bn in Sep 09; median Stg5.8bn

LONDON (MNI) – Public Sector Net Borrowing hit its highest level on
record in September as spending growth continued to outstrip receipts
over the past year, figures released by National Statistics Wednesday
showed.

The bleak figures come ahead of the publication of the
Comprehensive Spending Review later today which is expected to see cuts
of around 25% to total departmental spending.

Chancellor of the Exchequer is likely to point to the record high
borrowing figures as evidence of Labour’s poor record and use them to
justify the tough cuts in spending.

Excluding financial sector interventions PSNB rose to Stg16.166
billion in September from Stg15.461 billion in September 2009. This was
the highest outturn for a September on record and above analysts’
expectation for a Stg15.9 billion outturn.

Including interventions PSNB rose to Stg15.607 billion from
Stg14.806billion, also the highest for a September on record and above
the median forecast of Stg14 billion.

The Treasury has put the focus firmly on the excluding financial
sector interventions measure as it believes the fluctuations in the
value of the stakes it took in the banking sector distort the underlying
picture of the public finances.

On an accrued basis, current spending growth rose 10.2% in the year
to September, while receipts growth was up 7.8%.

For the financial year to September, spending was up 6.8%, below a
9.2% rise in revenue growth, a tentative sign that the ballooning
deficit may be coming under control.

The current budget excluding financial sector interventions posted
a deficit of Stg13.2 billion in September, up from a deficit of Stg11.7
billion in September 2009, also a record for a September.

The Public Sector New Cash Requirement rose to Stg20.736 billion in
September, above the median forecast of Stg5.8 billion, and up from
Stg19.18 billion in the same month a year earlier.

–London bureau: email: drobinson@marketnews.com

[TOPICS: MT$$$$,M$B$$$,MABDS$]