Labour back to its best?

[Guest Grim Reaper]

from here

The government's finances slipped further into deficit last month, making it almost certain Chancellor of the Exchequer Gordon Brown will bust his borrowing target for the fiscal year in spectacular fashion.

The Office for National Statistics reported on Monday a public sector net cash requirement for last month of 8.6 billion pounds, the highest September number ever and well above analysts' forecasts of a 6.5 billion pound shortfall. It was also over three billion pounds worse than September last year.

That brought the government's cash overdraft for the first half of the fiscal year to next March of 22.2 billion pounds, the biggest number since 1993/94 when the previous Conservative government established a record deficit for the full year.

Financial markets showed little reaction to the data, however, as they are already expecting a glut of supply of government bonds, or gilts, the government will issue to cover the hole in its accounts.

"It is a very disappointing set of numbers. With the focus on public borrowing the Chancellor is going to have a lot to do to come anywhere near his forecast this year," said David Page, economist at Investec.

On the government's preferred accruals-based measure, which gives a picture of the underlying state of the public purse, public sector net borrowing came in at 2.8 billion pounds last month, slightly less than markets had expected.

But the grim news for Gordon Brown was that the PSNB for the first half of the fiscal year was 22.5 billion, the highest for nine years and already over 80 percent of the total 27 billion shortfall he forecast in his April budget for the full year.

The development is because government spending excluding investment is up 10 percent so far this year, well above target, while revenues are only up six percent, below expectations.

While economists expect that the public finances will not continue to deteriorate in the second half of the year at the same pace as in the first half, they expect a deficit of around 37 billion pounds for the year, well over three percent of gross domestic product.

Indeed, a report out on Monday from the Ernst & Young ITEM club forecast that Brown would overshoot his 27 billion pound borrowing forecast for this fiscal year by around 10 billion pounds.

But junior Treasury minister Ruth Kelly said the government would meet all its spending commitments and stay within its own fiscal rules which require the government to borrow only to cover public investment over the economic cycle.

Kelly was not saying, however, that the Treasury would meet its target for this year.

Brown ran several years of healthy surpluses after the Labour government swept to power in 1997. But now the government is ramping up spending on key public services at a time when the economy and financial markets have been weak, crimping tax receipts for the exchequer.

But Treasury officials are hoping that the economy, which now appears to be recovering strongly, will soon put its finances back on track as faster growth should swell inflows of tax revenues. But some economist think Brown may eventually have to raise taxes again.

The labour goverment is back to what it does best - overspending. Are the british public really going to tolerate this gross mismanagement?

[Tankus]

Its not the Government that is at fault .....Its the people out there that are stupid enough to have voted for cheesy B'lair in the last election .......

I see a definite need of culling ..... In order to get this country back on to its feet.

[Guest Grim Reaper]

perhaps a deliberate sabotage of electric shock machines?

did Mr Blair have to wait in a corridor for 5 hours before treatment one wonders? If not, why is he recieving special treatment from HIS Nhs??

[Tankus]

Get real Lucy baby ......!

They shut the ward, terminated a few grannies on life support ,to get the beds free .....and frog marched in some of the best cardiologists in the country to sort him out ......

Wifelet even got a few freebie Nurses uniform's for her freeloading shower partner....