According to the latest figures from the Office for National Statistics, public sector net borrowing was £20.3bn in November, up £4.9bn on November 2008’s numbers. This is the highest reported figure of its kind since the ONS began measuring it in 1993.
The public sector current budget was in deficit by £16.2bn, up £3bn from 12 months ago. Also, in November alone, the public sector net cash requirement was £14.7bn, a £4bn higher net cash requirement than in November 2008 of £10.8bn.
Overall, public sector net debt was £844.5bn, equivalent to 60.2 per cent of GDP. This compares to £706.2bn or 49.6 per cent of GDP as at the end of November 2008.
Liberal Democrat shadow Chancellor Vince Cable says: “These figures confirm that when the economy does move out of recession there is a massive task ahead to sort out the public finances.
“It reinforces the lack of leadership given in the Government’s pre-Budget Report, which gave no indication of how the deficit will be reduced in a systematic way.”
Henderson New Star economist Simon Ward says the need for gilt sales will increase six or seven-fold next year as annual net cash requirement rises to £223.3bn in 2010, meaning the Government will have to sell at least £18bn of gilts each month next year.
He says: “As a result, the rise in yields is likely to boost pressure on an incoming Government to accelerate fiscal tightening.”