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Public finances meet Budget forecasts

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Date: Friday 18 Apr 2008

LONDON (ShareCast) - There’ll be a sigh of relief in Alistair Darling’s office today after it was revealed that public sector borrowing for the last financial year came within the chancellor’s target.

Public sector net borrowing (PSNB) was £35.6bn in the fiscal year to 31 March 2008, according to the Office for National Statistics, up from £30.1bn a year earlier, but less than Darling's forecast of £36.4bn.

The government's preferred measure of borrowing rose far more than the £7.9bn analysts had predicted though, up to £10.2bn last month, making it the worst March on record.

Analysts are seriously concerned that slowing economy activity could cause borrowing to overshoot government forecasts of £43bn for 2008/0 by at least £2bn.

Also in today’s report, the current budget, used to assess Gordon Brown’s ‘golden rule’, showed a deficit of £3.6bn last month versus a £1.3bn shortfall the year before.

The annual current budget deficit for the fiscal year stood at £7.6bn, matching the chancellor’s forecasts.