• Public sector borrowing in August 2011 was £15.9bn, compared with £14.0bn in August 2010

Commenting on the public sector finance figures for August, published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:


“The borrowing figures for August were higher than expected but the overall position in the first five months of the current financial year is better than many have feared. With UK economic growth likely to remain weaker than the OBR has predicted, it is still possible that the government will overshoot its borrowing targets for the year. The BCC’s latest forecast predicted a small overshoot of £5bn but this excess would be understandable in the face of the difficult economic circumstances.

 “Making allowances for this, the fiscal strategy is still on course and it is important that the government perseveres with the job of reducing the deficit and stabilising Britain’s public finances. There is room for modifications within the plan that could make it easier for business to deliver growth. Meanwhile, to reduce risks of a setback the MPC must maintain low interest rates and give active consideration to increasing the QE programme.”