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UK borrowing jumps to £15.9b in August

LONDON (AP) — Britain's public sector borrowing soared to £15.9 billion ($24.7 billion) in August, a record for the month and well above analysts' estimates, official data showed Tuesday.

The August borrowing compared to £14.1 billion a year earlier, the Office for National Statistics said, while the analysts' forecast was £12.5 billion.

The unexpectedly large figure is a stark reminder of the challenge the government faces as it prepares to announce its plans for spending cuts next month.

"August's overshoot clearly casts some doubt on the ability of the government to meet the June budget projection of annual borrowing of £149 billion," said Samuel Tombs, economist at Capital Economics.

Tombs said it was disturbing that borrowing climbed despite stronger than forecast growth in the economy in the second quarter.

The figures for the first five months of the fiscal year were slightly more encouraging for the government, with total borrowing of £58.1 billion compared to £61.9 billion a year earlier.

"We do not draw any strong conclusions from today's news regarding the medium-term outlook for the deficit, which the evidence so far suggests will come in a little below the ... full-year forecast of £149 billion," said Simon Hayes at Barclays Capital.

"However, this record level of borrowing will keep the pressure on the government to press ahead with its ambitious deficit reduction plan."