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UK government finances under the spotlight

While this figure brings the total for the first nine months of the financial year to an enormous £120 billion it was less than analysts had expected with only a £2 billion increase on the same figure last year - against an average £7 billion a month year-on-year increase over the last nine months.

While the government is still on target to hit its forecast of £178 billion in borrowings for the current tax year there could be a positive angle with expectations that the banking bonus tax would bring in more money than initially expected. However in the broader scheme of things, the additional funds expected from the banking bonus tax will do very little to chip away at the enormous budget deficit accumulated so far.

Indeed, if the UK was to experience a double dip recession or a further mild downturn we could see the £178 billion forecast quickly adjusted upwards. Investors and analysts are still demanding that the UK government issues a detailed report on how it intends to attack the growing budget deficit. This issue is now starting to impact upon the reputation of the UK although it is unlikely we will see the sovereign credit rating reduced in the short to medium term.

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