By Max Clarke
Public sector borrowing during March 2011 decreased by just under 7% over March 2010, the Office for National Statistics has revealed.
Over the 2010/11 financial year, net borrowing was £141.1 billion; down from the £156.5 billion figure the previous year, and down even from the Office for Budget Responsibility’s £145 billion forecast.
The news will serve to vindicate Chancellor Osborne’s aggressive cuts policy as the borrowing deficit is visibly narrowing, albeit incrementally. Borrowing still remains high, as Rowena Crawford, research economist at the Institute for Fiscal Studies comments:
“The estimated deficit of £141.1 billion is still, however, the second highest level of borrowing as a share of national income since the Second World War, surpassed only by the amount borrowed in 2009—10. Furthermore lower borrowing in 2010—11 will not necessarily feed through into lower borrowing in future years. As the source of lower borrowing last year was primarily due to lower borrowing by public corporations and lower than expected spending by central government on public services, it could turn out to be a one-off windfall for the Government rather than reflecting a permanently better underlying fiscal position.”
Net debt, however, continues to grow- reaching £2.3 trillion for the most recent fiscal year, up by £100 billion the previous year.