Public borrowing hits all-time record high

Huddersfield Daily Examiner (Huddersfield, England), Feb 20, 2009

PUBLIC borrowing spiralled to a new record high as official figures warned bank bail-outs could add up to pounds 1.5 trillion to the national debt.

Net borrowing between April and January soared to pounds 67.2bn, the Office for National Statistics (ONS) said - prompting forecasts that it could hit pounds 100bn this year.

The ONS added that Royal Bank of Scotland and Lloyds Banking Group - rescued with pounds 37bn in taxpayer cash - were being classed as public corporations.

Adding their liabilities onto the public books would add between pounds 1 trillion and pounds 1.5 trillion to net debt, it estimates - equivalent to between 70% and 100% of the UK's entire output.

The public finances have come under increasing strain in a worsening recession as tax revenues fall and benefit payouts rise.

Plans to kick-start the economy and bank rescues have added to the pressure.

The latest figures sparked a fresh political row as opposition politicians lined up to attack the Government's handling of the public finances.