The bad news continues to come and the government’s borrowing continues to soar as matters get more and more out of control. .
Christina
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WALL STREET JOURNAL 18.9.09
U.K. Borrowing Soars as Receipts Fall
By LAURENCE NORMAN
LONDON -- The U.K. government borrowed a net £16.1 billion ($26.5 billion) in August, the third highest monthly amount on record, the Office for National Statistics reported Friday as the government confirmed Chancellor of the Exchequer Alistair Darling has been meeting fellow ministers to discuss public spending plans.
August's borrowing data , the highest for that month since records began in 1993, plays into an intensifying political battle over public spending plans, which looks set to be the central dividing line in a general election due by mid-2010. Earlier this week, Prime Minister Gordon Brown acknowledged for the first time that his government must make spending cuts once the recession ends.
For the financial year to date, starting in April, the ONS said public sector new borrowing was £65.3 billion compared with borrowing of £26.1 billion in the year earlier period.
The government is targeting a full-year PSNB of £175 billion, more than 12% of GDP as the deepest recession in decades forces it to plug the gap between income and expenditure.
A Treasury spokesman said the August data were "in line with" the budget borrowing forecasts. "They reflect the impact of the global financial crisis on tax receipts as well as the action we are taking to support the economy right now and invest to benefit from the recovery," the spokesman said.
Fiscal analysts were less sanguine.
"Today's figures confirm the dire state of the public finances," said John Hawksworth, head of macroeconomics at PricewaterhouseCoopers LLP. "It seems likely that budget deficits will overshoot Treasury forecasts not only in 2009/10 but for some years to come, resulting in pressure to tighten fiscal policy by more in the medium term than the Treasury's Budget plans suggested."
Central government receipts fell 9.2% in August from a year earlier, with double-digit declines in all the main tax revenue figures. In the financial year-to-date, central government receipts fell 11.4%.
Conservative leader David Cameron, Mr. Brown's chief challenger in next year's general elections, said the government is now borrowing in a single month what it previously borrowed in a whole year. "They have completely lost control of the nations' finances," he said.
Asked by reporters about a BBC report that Mr. Darling had met with fellow ministers in recent days to discuss possible spending cuts, the prime minister's spokesman said "decisions for public spending are a matter for the chancellor." "It's not surprising that the chancellor has had meeting with ministers about a range of issues and a range of spending issues," the spokesman said.
The spokesman said the chancellor had a number of discussions at ministerial level and with officials and will be returning to spending matters at the pre-budget report later in the autumn. "Both the prime minister and the chancellor have made it clear tough choices on public spending lie ahead," the spokesman said.
Mr. Cameron said it was "extraordinary" that Mr. Darling was only now tackling head-on the issue of spending cuts.
"What has this government been doing for the last year?" he said, pointing out that businesses and households have long past seen the need to cut back in the economic recession. "Our government seems to have been entirely asleep on the job."
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COUNCIL OF MORTGAGE LENDERS 18.9.09
Gross lending estimated at £12.6 billion in August
Gross mortgage lending totalled an estimated £12.6 billion in August, according to the Council of Mortgage Lenders. This represents a decline of 13% from July's revised total of £14.5 billion, but a seasonal fall in lending activity in August is to be expected. Estimated gross lending in the month was 37% lower than last August's total of £19.9 billion.
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TODAY'S NEWS - WHO’S SAYING WHAT? 18.9.09
Via Politics Home
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BBC News/Sky News
Government has “completely lost control of nation's finances”, says Cameron
David Cameron MP, Leader of the Opposition
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Mr Cameron accused the government of having lost control of the national finances, and claimed that the Conservatives had been upfront about cuts in a way that the government had not.
He said that £16bn of public sector borrowing in August shows that the government has “completely lost control of the nation's finances”.
He went on to describe reports that Alistair Darling has this week been talking to Cabinet colleagues about areas where cuts are possible as “extraordinary - what has the government been doing for the last year. Our government seems to have been entirely asleep on the job.”
“We are being straightforward and upfront about what needs to be doing, unlike the government,” he added.
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