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Public borrowing to soar to £175bn

Press Association
Wednesday 22 April 2009 08:10 EDT
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Public borrowing will soar to a record £175bn in the current year - or 12.4 per cent of the UK's annual economic output - Chancellor Alistair Darling said today.

The plunge into red comes as the Treasury wrestles with a toxic combination of falling tax receipts, higher spending and the cost of bank bail-outs.

Including the £90bn borrowing for 2008/09 unveiled today, total net borrowing is forecast to hit £696 billion by 2012/13 - almost £240bn more than the Chancellor predicted in November's Pre-Budget Report.

Mr Darling also confirmed the worst year for the economy since the Second World War with a 3.5 per cent decline in 2009 - far worse than his pre-Budget forecasts.

He expects the economy to grow by 1.25 per cent in 2010 - also below November's forecasts - before the pace of the economy quickens in 2011 with a 3.5 per cent expansion.

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