Britain’s public finances deteriorated unexpectedly last month, recording their worst August in three years, and a decline in industrial orders signalled that a global slowdown is hitting the country’s economy.
Chancellor George Osborne will now have a tougher job meeting his target of reducing borrowing this year. His goal of a budget surplus in less than five years also looks increasingly hard, some economists said, as uncertainty grows about the world economy.
Britain’s headline measure of public borrowing rose to 12.1 billion pounds in August from 10.7 billion pounds a year earlier, the Office for National Statistics said. Forecasts were it would narrow to 9 billion pounds.
Since the financial year began in April, the government has borrowed 10 percent less than it did in the same period last year. But that is not enough for Osborne to be sure of meeting deficit-reduction goals he set in July, after his Conservative Party won an election.
His target is to cut the deficit to 3.7 percent of economic output, down from 5.0 percent in the last financial year.