In the autumn statement, George Osborne was able to claim borrowing was falling as the OBR predicted net borrowing in 2012/13 would be lower than in 2011/12. The fall was reported to have put Ed Balls off his stride in the Commons since expectations were for a rise.
New figures out today suggest the chancellor might have been wrong after all. Borrowing in December 2012 was £15.4 billion compared to £14.8 billion in December 2011.
As Table 2 of the ONS’s release (pdf) shows, net borrowing (excluding the one off transfer of Royal Mail pensions in April 2012) from April to December 2012 was higher than from April to December 2011:
Table PSF1 at the back of the release shows net borrowing for the calendar year 2011 and 2012. If the £28 billion from the Royal Mail pensions are excluded, borrowing in 2012 was £128.9 billion compared with £121.4 billion in 2011.
It turns out that borrowing is, after all, rising. George Osborne will now need a rapid turnaround in figures for January and February to avoid an embarrassing admission when he presents his budget on March 20th.
The one-off sale of the 4G licenses may give him a cosmetic boost but as Alan Clarke from Scotia Bank points out:
“The trick is going to be looking through these distortions. In all likelihood when these are stripped away we will probably have a slight overshoot in borrowing if the recent track record is anything to go by.”
If it happens it will be another devastating indictment of the chancellor’s policy.