–Mar PSNB-X Stg18.174bn vs Stg17.951bn in Mar 2011
–2011/2012 PSNB-X Stg125.974bn vs Stg136.841bn in 2010/11

LONDON (MNI) – Public Sector Net Borrowing hit its highest level
since November 2010 in March, but was bang-in-line with the latest
forecast from the Office for Budget Responsibility, figures released by
National Statistics showed on Tuesday.

While borrowing for March was higher than expected, there were
downward revisions to earlier data bringing it broadly in line with the
market expectation. An undershoot of Stg3.5 billion on the central
government net cash requirement, CGNCR, means the Gilt remit for 2012/13
will likely be revised downwards.

PSNB-X (which excludes financial sector interventions) rose to
Stg18.174 billion in March, up from Stg17.951 billion in the same month
a year earlier. This was above the median for Stg16.5 billion and the
highest March outturn since 2010. There was, however, a downward
revision to earlier data from April 2011 to February 2012 of Stg2.2
billion.

For the 2011/12 financial year, PSNB-X came in at Stg125.974
billion, down from Stg136.841 billion in 2010/11, and in line with the
OBR’s forecast of Stg126 billion made last month.

The data revealed that government departmental spending fell for
the first time since 1955 in the latest financial year, clearly showing
that the government’s plans to cut back on spending are having a real
impact.

The CGNCR fell to Stg126.361 billion in March from Stg139.661
billion in March 2011, below the OBR’s forecast of Stg129.9 billion.
This Stg3.5 billion overfund suggests the Debt Management Office will
reduce planned Gilt issuance for the current financial year by a similar
amount.

National Statistics said that the wind up of the Bank of England’s
Special Liquidity Scheme had led to a drop in corporation tax receipts
in March of Stg0.7 billion. In April, it is estimated that Stg2.3
billion will be transferred from the BOE to the Treasury which will
improve the PSNB-X by the same amount.

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

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