UK Nov PSNB 11.2 bln stg, biggest deficit since records began in 1993 UPDATE

UK Nov PSNB 11.2 bln stg, biggest deficit since records began in 1993 UPDATE

	Published : Thu, 20 Dec 2007 10:29 By : Agencies Print this Story

(Updating to add further details)

LONDON (Thomson Financial) - The UK government recorded its biggest ever monthly deficit in November, raising fears that the Chancellor of the Exchequer Alistair Darling will not meet his forecasts for the current fiscal year.

The Office of National Statistics revealed that public sector net borrowing, the government's preferred measure of the public finances, stood at 11.2 bln stg in November. That was the biggest monthly deficit since records began in 1993 and was way above analysts' forecasts of a 9.5 bln stg deficit.

Last November the deficit stood at 9.1 bln stg.

In the fiscal year to date from April, the statistics office said the deficit stood at 36.2 bln stg, way up on the 26.0 bln recorded over the same period last year.

In his pre-budget report in October, Darling estimated that the deficit this fiscal year would be 38.0 bln stg.

Elsewhere in today's release, the statistics office said the current budget deficit was 9.1 bln stg in November, compared with 7.3 bln a year earlier.

November's shortfall was the highest since records began in 1998.

For the April to November period, the budget showed a deficit of 23.1 bln, worse than the 14.6 bln deficit in the same period last year.

The current budget is used in calculating the so-called 'golden rule' of balancing the budget, excluding investment, across the economic cycle.

According to Darling, the current budget is seen at 8.3 bln stg in 2007/08.

Elsewhere in today's release, an alternative but more volatile cash measure of the public finances worsened too.

The public sector net cash requirement in November was 8.9 bln stg, up on the 7.4 bln recorded in the same month last year.

Meanwhile, the statistics office said net debt at the end of November stood at 519.4 bln stg, or 36.7 pct of GDP.

A year ago, net debt was 487.6 bln stg, or 36.4 pct of GDP.

The government's second fiscal rule, the sustainable investment rule, requires net debt to be below 40 pct of GDP.

In his pre-budget report, Darling forecast net debt to be 37.6 pct of GDP in 2007/08.

pan.pylas@thomson.com

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