• Public sector borrowing in October 2011 was £6.5bn, compared with £7.7bn in October 2010
Commenting on the public sector finances for October published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“These figures were broadly in line with expectations, with the overall position in the first seven months of the current financial year better than many had hoped. With growth likely to remain weaker in the next few quarters than the OBR predicted in March, it is still possible that the government may slightly overshoot its borrowing target for the year. In September, we predicted a modest excess of £5bn, but judging by more recent trends, the overshoot may be even smaller.
“Given the difficult economic situation, we believe that the fiscal strategy is on course and the government is right to continue to seek to reduce our structural deficit. But with problems facing the eurozone and recent rises in UK unemployment, it is even more important to reallocate priorities within the overall fiscal plan to help businesses create jobs, export and invest. Given the flexibility within the deficit-cutting plan, we would urge the government to announce new measures to support businesses in next week’s Autumn Statement. We are also hoping to see the introduction of a comprehensive credit-easing programme to increase the availability of lending to small businesses, and would expect the MPC to support such a scheme.”