UK public finances slide further into red

Britain's public finances slid further into deficit last month as the government continued to pump up spending on key public …

Britain's public finances slid further into deficit last month as the government continued to pump up spending on key public services.

The Office for National Statistics reported a bigger-than-expected public sector net cash requirement of £5.36 billion pounds for September, bringing the cash shortfall for the fiscal year to date to £7.62 billion pounds compared to just £260 million a year earlier.

The £5.36 billion figure was the highest monthly borrowing total since June and the highest September figure in nine years.

On the government's preferred, accruals-based measure known as public sector net borrowing, there was a deficit of £5.23 billion pounds last month, the highest since May and the biggest September shortfall since records began in 1993/94.

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The measure, which strips out volatile elements and shows the underlying state of the public coffers, showed a deficit for the first half of the fiscal year of £12.418 billion, already larger than the £11 billion Chancellor of the Exchequer Mr Gordon Brown forecast in his April budget.

However, economists expect the second half of the fiscal year not to show the sort of deficits that the first half has but they nevertheless expect the economy to grow more slowly than Mr Brown forecast in March, meaning tax revenues are likely to undershoot.