–Oct PSNB-X Stg6.498bn vs Stg7.171bn in Oct 2010
–Oct Current Budget-X -Stg4.472bn vs -Stg4.745bn in Oct 2010

LONDON (MNI) – Public Sector Net Borrowing fell by a little more
than expected in October, leaving the Chancellor, George Osborne, still
on track to meet borrowing forecasts for the current fiscal year.

Figures from National Statistics showed PSNB-X fell to Stg6.498
billion in October, from Stg7.171 billion in the same month a year
earlier. This leaves borrowing down 13.2% for the year to date, better
than the Office for Budget Responsibility’s March forecast for a
decline of 11% over the full year.

Analysts had forecast borrowing to ease to Stg6.8 billion in
October.

There was an upward revision to the September borrowing data to
-Stg12.964 billion from -Stg14.138 billion while borrowing between
April-August 2011 was revised down by just over half a billion.

While Osborne may meet this year’s borrowing forecasts, downward
revisions to growth over the coming years means he is likely to revise
upwards forecasts for borrowing in later years when he presents the
Autumn Statement next Tuesday.

Prime Minister David Cameron conceded yesterday that tackling the
UK’s debts was “proving harder than anyone envisaged”. Such a candid
remark suggests he was priming markets for significant upward revisions
to borrowing next week, with the possibility that the deficit would not
be closed by 2014-15 as Osborne had expected.

Positive points from the latest report were that receipts growth
was up 4.1% in October compared with a year earlier, outstripping a 1.1%
rise in spending. For the year to data receipts were up 5.1% compared
with a rise of 2.4% in spending. Still, the growth in receipts is below
the OBR’s latest forecast of 6.9% due to the lack of economic growth.

The current budget deficit excluding financial sector interventions
remained broadly stable at -Stg4.472 billion in October from -Stg4.745
billion in October 2010.

The central government net cash requirement, the key determinant
for gilt issuance, fell to -Stg2.093 billion in October from
Stg1.507 billion in the same month a year ago.

–London bureau: 0044 20 7862 7491; email: drobinson@marketnews.com

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