–Apr PSNB-X Stg9.954bn vs Stg7.25bn in Apr 10
–Apr PSNCR Stg3.259bn vs -Stg5.834bn in Apr 10
–Apr Current Budget -Stg8.388bn vs -Stg5.58bn in Apr 10

LONDON (MNI) – UK public sector net borrowing rose to its highest
level for an April on record as spending growth picked up significantly,
according to figures released by National Statistics Tuesday.

Public sector net borrowing excluding financial interventions
(PSNB-X) came in at Stg9.954 billion in April, up from Stg7.25 billion
in the same month a year ago and well above analysts’ forecasts for a
stg6.6 billion outturn. It was also the highest April outturn since
records began.

The figures are not a great start to the new fiscal year for the
government which have been trying to rein in spending to cut the fiscal
deficit.

A large part of the deterioration in PSNB since last year was due
to the one-off bank payroll tax which boosted receipts by Stg3.5 billion
in April 2010 and was not repeated this year, something which analysts
appear to have overlooked when making their forecasts.

Spending growth rose 5% on the year on an accrued basis, up from
-0.2% in March and the highest since November 2010. National Statistics
cautioned that the April spending data were partly based on forecasts at
this stage, adding that it would likely be subject to revision which
could be significant.

Receipts growth was down 0.8% on the year, driven by a 10% fall in
taxes on production due to the boost to revenue from the payroll tax
last year.

The current budget deficit rose to Stg8.388 billion in April from
Stg5.58 billion in April 2010, the largest April shortfall on record.

The Public Sector Net Cash Requirement stood at Stg3.259 billion in
April following a net repayment of Stg5.834 billion last year and above
the median forecast of Stg2 billion.

Some brighter news came from a downward revision to borrowing for
2010/11, with the PSNB-X revised down to stg139.4 billion from stg141.2
billion. The central government net cash requirement, however, was
little changed.

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

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