Duncan’s Economic Blog

Grim Public Finances

Posted in Uncategorized by duncanseconomicblog on September 21, 2011

Today’s public sector borrowing numbers are pretty grim.

A few quick bullet points:

  • Public sector net investment so far this financial year is £8.0bn against £10.9bn last year. Despite all Clegg & Cable’s talk in the past few days about ‘government investment as a stimulus’.
  • Welfare spending is up 5% year on year. Nearly twice as much as the OBR forecast (3%).
  • Overall borrowing is down 7% this financial year. The OBR predict it will fall by 16% in 2011/12.

That last point is crucial. We are already undershooting the OBR’s target and the economy (according to just about every independent forecaster) is set to slow further.

The November Statement is going to be grim for the government. Not only are the growth forecasts for 2011 and 2012 (and possibly 2013 & 2014) going to be revised down heavily but borrowing is going to be revised up.


3 Responses

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  1. Dave Holden said, on September 21, 2011 at 10:31 am

    This should provide interesting reading 😉


  2. Gareth said, on September 21, 2011 at 12:32 pm

    “The government is borrowing more than expected! And the GDP figures are much worse than expected. So the government should borrow even more! And then, erm. Hang on… how is this supposed to work?”

    • metatone said, on September 21, 2011 at 8:22 pm

      And then spend. It’s counter-intuitive… but then economics is neither inherently intuitive, nor a morality play.

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