The figures for last month’s borrowing are terrifying. In a month when revenues are supposed to exceed spending, the government borrowed £8.016bn. As ever, John Redwood has some incisive analysis:
‘In the April-July period last year the government borrowed an extra £16 billion. This year they have borrowed an extra £50 billion. It means we are on course to exceed the eye wateringly large sums they forecast for this year’s total borrowing.
Spending is up a massive £19 billion on last year in the first four months, and revenue is down a predictable £21 billion thanks to the VAT cuts and the fall in activity. No wonder the Governor thinks we ought to print some more money – who is going to lend us all this? Interest rate increases to get people to buy more government debt will be the inevitable result of this failure to hit very relaxed targets for spending and borrowing.
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