UK public sector finance unexpectedly worsens in September

Britain's public sector borrowed more than expected in September, putting the government further off course to achieve its budget target, according to figures released on Friday (21 October) by the Office for National Statistics (ONS).

The data showed public sector net borrowing, excluding public sector banks, rose £1.3bn ($1.6bn) to £10.6bn last month from the corresponding period in 2015, compared to the £8.5bn figure analysts had forecast. In the financial year-to-date, public sector net borrowing, excluding public sector lenders, fell by £2.3bn to £45.5bn from the corresponding five-month period 12 months ago.

Meanwhile, public sector net debt, again not accounting for public sector banks, at the end of of last month stood at £1.63trn, equivalent to 83.3% of gross domestic product, an increase of £39.5bn compared with September last year.

The ONS-added debt as a percentage of GDP fell by one percentage point last month, compared with September 2015, marking the fourth successive month of debt as a percentage of GDP falling on a year-on-year basis.

Consequently, the figure indicates that, on an annual basis, Britain's economy is currently increasing faster than net debt, excluding public sector banks.

The Office for Budget Responsibility estimated the public sector would borrow £72.2bn during the financial year ending in March 2016, but the government looks increasingly unlikely to achieve its target.