This makes it likely that the Office for Budget Responsibility (OBR) will revise up its borrowing forecasts for the year when it publishes its latest healthcheck next week.
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The United Kingdom government’s deficit-cutting drive has suffered a heavy blow ahead of its spending review on Wednesday after official figures showed the worst October for the public finances over the past six years. A Reuters poll predicted borrowing of just £6.0 billion for the month. In fact, to meet that target the government would have to restrict borrowing to £15 billion between now and April. The OBR’s previous forecast called for a 23% decrease in borrowing over the financial year on lower spending and more tax receipts. This was £1.1bn higher than a year ago and represented the biggest October deficit since 2009.
While government coffers usually record a hefty surplus in January that would be able to bring borrowing numbers down again, analysts still foresee the OBR will raise its estimate for this fiscal year’s budget deficit.
It added that “government borrowing remains too high”.
George Osborne is on track to miss his borrowing targets by more than £10 billion this year after another disappointing month for public finances that leaves him little room for giveaways in the autumn statement next week.
But economists pointed out that the dismal figures mean it’s unlikely Osborne will slow the pace of austerity in next week’s Autumn Statement.
“We’ve learned there’s no shortcut to fixing the public finances to provide economic security for working people – that’s why in the Spending Review next week we’ll continue the hard work of identifying savings and making reforms necessary to build a resilient economy”, the spokesman said.
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Howard Archer chief United Kingdom and European economist at IHS Global Insight said: “George Osborne now has an almighty task to meet his fiscal targets for 2015/16”.
