Net borrowing came in at £15.3bn, a highest for the month of August since records began in 1993, the Office for National Statistics said on Tuesday. Analysts had forecast a Public Sector Net Borrowing (PSNB) of £12.51bn.This suggests that a large proportion of government debt is indeed inflation-linked, so the Coalition won't be able to inflate their way out of this mess. On balance, that is good news.
The government's preferred measure on which fiscal forecasts are based, PSNB excluding bank rescues, came in above forecasts at £15.9bn.
The ONS said the deterioration in the public finances was mainly due to higher interest payments on gilts, as a result of the rise in the retail price index.
Interest payments were £3.8bn in August compared with £1.3bn a year ago.
This was offset by a 6.3pc rise in tax receipts were 6.3pc higher than a year early. A £1bn rise in receipts from the 50pc bank bonus to £3.5bn for month has been applied to April borrowing, so is not included in August figures.
Time to get on with the cuts!