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Public sector borrowing hits record high

Net public sector borrowing in the UK hit a record high of £15.3 billion in August which was up from £14.1 billion over the same period last year. This was well ahead of analyst forecasts of a £12.5 billion shortfall and is likely to see the UK government miss its target annual borrowing figure of £149 billion. While the figure for the August was a surprise to say the least it does further strengthen the UK government's appeal to cut UK public sector spending.

All eyes will be on the figure for September with the hope that we do not see a further increase in net public sector borrowing which could, if it continues, impact on the UK government's sovereign credit rating. These are worrying times for the UK government amid signs that the unions in the UK are ready to strike and public anger is beginning to increase in relation to proposed public-sector spending cuts. However, the UK government has little choice but to continue cutting public sector spending in the short to medium term to protect the UK's sovereign credit rating.

We are only now beginning to pay the price for excessive spending over the last decade which saw the public sector as a whole mushroom in size and begin to dominate the UK economy.

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