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UK government borrowing up by a fifth over past six months

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Public sector borrowing has risen by a fifth during the first half of the financial year, official figures show.Borrowing for the six months to September has now hit
But John Hawksworth, chief economist at PwC, said: "Today's data showed the UK public finances heading further into the red, with the deficit more than ?7bn higher in the first half of this financial year than the same period last year.
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"This borrowing overshoot will not make the chancellor's choices any easier as he heads towards his first Budget on 6 November."According to the Office for National Statistics (ONS), the borrowing figures for September mark the first annual rise in that month for five years.The increase comes despite the government receiving a ?1.1bn dividend boost last month from part-nationalised lender Royal Bank of Scotland.The ONS said borrowing was pushed higher due to seasonal payments of ?2bn for winter fuel and ?2.7bn of student loan write-offs - both of which are recorded in September each year.
Sajid Javid is expected to loosen fiscal policy in the Budget
Mr Javid plans to set out new long-term fiscal rules in next month's Budget.Currently the rules state that borrowing should remain below 2% of national income, but most expect him to relax this. "September's better-than-expected public finance figures do not change this year's overarching themes of higher spending and borrowing. If anything, today's release will only encourage the chancellor to loosen fiscal policy at the Budget next month," said Thomas Pugh, UK economist at Capital Economics."We already know that the chancellor wants to review the fiscal rules in the Budget on 6 November, as there is very little chance of hitting the current ones."We don't know what the new fiscal rules will be, but they are likely to allow for a substantial loosening of fiscal policy at the Budget, which would support economic growth. Of course, whether this happens depends on whether there is a Brexit deal."
Office for National Statistics
UK economy
Budget 2019
Sajid Javid
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