By Claire West
Commenting on the public sector finances for November 2012, published by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC) said:
“On a comparable basis, public sector net borrowing for April to November 2012 was £8.3bn higher than in the same seven months of the previous year.
However a positive development is that the ONS now estimates that borrowing for the full year 2011-12 is now £4.4bn lower than the OBR estimated this month.
Nevertheless, the new figures indicate that the borrowing outcome for the current financial year will be higher than the OBR predicted. Some commentators are now taking the view that the UK is likely to lose its AAA credit rating in the next few months, but it is premature to take the view that this is unavoidable. Much will depend on whether the markets continue to assume that the Chancellor is firmly committed to his deficit cutting plan. We believe that his commitment must be sustained, but that there should be some rebalancing within the overall spending envelope. While continuing to make cuts in areas such as welfare reform, pensions, and the size of the civil service, to ensure that the structural deficit is steadily reduced, we would like to see more effective spending measures that would enhance growth, and enable the private sector to drive recovery.”