UK borrowing hits February record

Public sector borrowing last month was £11.8bn, a record for the month of February.

The official figure, provided by the Office for National Statistics, was nearly double the £6.9bn forecast by economists.

Public sector net borrowing now stands at £123.5bn for the financial year so far.

This suggests the government remains on course to meet the £149bn borrowing total forecast for the full year.

That figure comes from the government-appointed Office for Budgetary Responsibility (OBR).

“The public finance numbers for February were significantly worse than expected,” said James Knightley from ING.

“Admittedly, recent numbers have been better than hoped, but today’s outcome further reduces the likelihood of any formal giveaway in tomorrow’s Budget.”

Net debt, which is the sum of all borrowing, was £875.8bn, the ONS said. That is equivalent to 58% of GDP or total economic output.

This time last year, the total was £729.9bn, or 50.8% of GDP.

‘Sweetener’

Although the year’s public borrowing is forecast to dip below official estimates, there have been calls for Chancellor George Osborne to resist a watering down its spending cuts in Wednesday’s Budget.

“The Treasury needs to resist the temptation to utilise the windfall to provide a little sweetener to the bitter pill of fiscal retrenchment,” said Andrew Goodwin, senior economic advisor to the Ernst & Young Item Club on Monday.

The BBC understands that he will announce a tax on private jet flights as part of plans to try to bring in more money to the Treasury’s coffers to help cut the budget deficit.

It is believed Mr Osborne wants to raise an extra £1bn a year by clamping down on tax loopholes and targeting the wealthy and businesses.

Travellers using corporate jets currently do not have to pay any duty.

The chancellor will consult on whether to extend air passenger duty to private jets or introduce a new tax on them.