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Public Borrowing Hits New Record

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http://news.bbc.co.uk/1/hi/business/8061019.stm

New government borrowing rose sharply in April, the Office for National Statistics (ONS) said.

Public sector net borrowing rose to £8.46bn this April compared to £1.84bn in the same month last year.

It was a new record for the public deficit in April, a month when government coffers are usually boosted by tax receipts.

Significantly, ratings agency Standard & Poor's revised its outlook for the UK to negative due to borrowing worries.

Blow to UK

The ratings agency said that Britain's triple-A rating for its government bonds was at risk in the future if the next government did not produce a credible plan to put its debts on a "secure downward trajectory".

It reaffirmed the UK's actual credit rating, but said the outlook had deteriorated because of massive borrowing to deal with the recession and the banking crisis.

S&P said that government debt could reach 100% of GDP by 2013. Currently, it is 53%, according to the latest ONS figures.

It is the first potential downgrade of UK public debt since the agency began rating government debt in 1978, and could lead to higher borrowing costs if it makes international investors less likely to buy Treasury bonds.

In a statement, the Treasury said that "the Budget set out a clear plan to halve the deficit within five years. That judgement was based on a deliberately cautious view of the public finances."

And it added that Standard & Poor's said it could revise its outlook to stable "if fiscal outturns are more benign than [they] currently anticipate".

Well done to the PM another record to add to the collection.

Does this confirm what was posted on Guido's blog the other day that tax receipts where down 20% and expenditure 13% above budget?

An emergency budget seems inevitable, I wonder who Ponzi Brown will blame that fact on it certainly won't be his fault.

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http://news.bbc.co.uk/1/hi/business/8061019.stm

Well done to the PM another record to add to the collection.

Does this confirm what was posted on Guido's blog the other day that tax receipts where down 20% and expenditure 13% above budget?

An emergency budget seems inevitable, I wonder who Ponzi Brown will blame that fact on it certainly won't be his fault.

Some figs

http://www.bloomberg.com/apps/news?pid=206...&refer=home

U.K. Budget Deficit Soars as Recession Ravages Tax Receipts

Last month, cash receipts of corporation tax dropped 27 percent from a year earlier. Value-added tax, a levy on sales, fell 23 percent and income tax declined 14 percent. Net spending on social benefits rose 8.9 percent after unemployment rose at the fastest pace since 1981 in the first quarter of the year.

A measure of the cash entering and leaving the Treasury showed a deficit of 5.2 billion pounds, the first April shortfall since 1996 and the highest for the month since records began in 1984. The median forecast of economists was a 2.5 billion-pound deficit. The deficit excluding investment spending was 7 billion pounds, the most for the month since records started in 1998.

Concern over the U.K. fiscal position grew after the Treasury predicted the deficit will reach 175 billion pounds this fiscal year and said it plans to sell an unprecedented 220 billion pounds of debt to cover the shortfall and the cost of propping up banks

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"debt is wealth remember, this just proves how rich we are".... :lol:

LOL at your comment there, but it certainly looks like the state of our public finances is awful now, and quickly getting worse.

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"debt is wealth remember, this just proves how rich we are".... :lol:

LOL at your comment there, but it certainly looks like the state of our public finances is awful now, and quickly getting worse.

Yep this is getting very serious very quickly despite all the lies coming from Darling's mouth. In this situation the Chancellor needs to be brutally honest rather than being some dizzy cheerleader trying to motivate the team that's already 10-0 down and that if they just work together they can pull it back and win.

The temptation will be to just keep getting the money from BoE to cover the hole, because it can't possible fail!!!

This nation is carrying far too much debt and the idiots just keep adding to it.

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There is one policy initiative from Gordo that is making a massive impact on the figures.

He stood up in Parliament a while back and announced that companies could defray their VAT, Income Tax/NICs, CT bills by coming to an arrangement with a specially set up unit at HMRC.

My company has taken advantage of this because the interest charged is far less than bank rates. You just phone up some spotty yoof and tell him you will pay the bill over the next 6 - 12 months and the yoof says yes OK and that is it.

Because this was policy on the hoof there are no systems in place and no questions asked. Companies with perfectly good cashflow or no cashflow are given the facility just by asking. There must also be companies that really are in trouble and should go under are being given a lifeline to run their businesses on VAT and employee tax and NIC. Whether this money ever comes back is open to question, my guess is a fair percentage won't.

To date 220,000 firms have taken advantage of this, that may account for partly of the shortfall in tax receipts.

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There is one policy initiative from Gordo that is making a massive impact on the figures.

He stood up in Parliament a while back and announced that companies could defray their VAT, Income Tax/NICs, CT bills by coming to an arrangement with a specially set up unit at HMRC.

My company has taken advantage of this because the interest charged is far less than bank rates. You just phone up some spotty yoof and tell him you will pay the bill over the next 6 - 12 months and the yoof says yes OK and that is it.

Because this was policy on the hoof there are no systems in place and no questions asked. Companies with perfectly good cashflow or no cashflow are given the facility just by asking. There must also be companies that really are in trouble and should go under are being given a lifeline to run their businesses on VAT and employee tax and NIC. Whether this money ever comes back is open to question, my guess is a fair percentage won't.

To date 220,000 firms have taken advantage of this, that may account for partly of the shortfall in tax receipts.

Another great plan from Gordon......

It just gets better.

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