Treasury Claims Rise In Public Sector Borrowing Supports Need For Cut-backs

Recent figures released by the Office of National Statistics (ONS) have revealed new public sector borrowing reached a historic high figure of £15.9bn in August, which also saw interest payments treble on the same month last year to £3.8bn. The rise has been put down to higher inflation leading to a rise in interest payments on index-linked government bonds.

Recent figures released by the Office of National Statistics (ONS) have revealed new public sector borrowing reached a historic high figure of £15.9bn in August, which also saw interest payments treble on the same month last year to £3.8bn. The rise has been put down to higher inflation leading to a rise in interest payments on index-linked government bonds.

However, the overall forecast for borrowing in 2010 – 2011 remains at £149bn; a decrease of £6bn on last year’s total of £155bn. A Treasury spokesman said the rise demonstrated why the government’s recent austere budget and proposed public sector spending cuts were in the best interests of the country. “If the government had not announced decisive action to bring borrowing down, debt interest would have been over £65bn by 2014-15, more than is spent on schools or defence.”

The latest figures will come as a blow to public sector workers with serious debt problems that were hoping for a reprieve before the rationalisation got underway.

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