UK public sector borrowing lower than expected in May

The UK Government's public sector borrowing fell below expectations in May, according to figures released today by the Office for National Statistics.

Provisional estimates point to net borrowing of £16bn in May, an 8% fall from May 2009. The budget deficit last month was £14.1bn, down from £15.7bn in May last year. Total net debt stood at £903bn, equivalent to 62.2% of GDP. This is an increase from May 2009 when net borrowing totalled £774bn, or 55.4% of GDP. Although the figures are better than expected, the key issue is that a major fiscal squeeze looms in the form of the cuts planned in next week's Budget, Says Vicky Redwood, a UK economist at Capital Economics. "The 12-month rolling total of borrowing appears to have peak...