LONDON (MNI) – It is plausible that government spending rises in
the final four months of this fiscal year, pushing borrowing up to match
the Office for Budget Responsibility’s November forecast, the OBR said
Wednesday.
Its comments came as November headline public sector borrowing
(PSNBX) came in below expectations, but the OBR is not convinced it will
undershoot for the 2011-12 fiscal year.
Figures released by National Statistics Wednesday showed PSNB-X
fell to Stg18.093 billion in November from Stg20.36 billion in the same
month a year earlier, a little better than the median forecast for a
slightly higher deficit of Stg19.7 billion.
From April to November, PSNB-X came in at Stg88.3 billion, down
from Stg98.7 billion in 2010/11.
To meet the November OBR full year forecast of Stg127.1 billion,
borrowing would have to be Stg1.3 billion higher than last year in the
final four months of 2011-12, and the OBR said that as it expected
receipts growth to continue around its current pace government spending
will have to rise.
“Central government spending growth would have to be higher than
during the year to date to match the EFO forecast. This is plausible as
departments expect to back-load their spending on public services and
administration more this year than last year,” the OBR said in a note.
–London newsroom: 00 44 20 7862 7491; drobinson@marketnews.com
[TOPICS: MFBBU$,M$B$$$,MABDS$]
