Highest October borrowing for five years – but total revised down

The final set of public finance figures before the general election has revealed the highest October borrowing for five years.

As political parties commit in the campaign to increase spending, the Office for National Statistics (ONS) reported that public sector net borrowing came in at £11.2bn last month – a £2.3bn increase on the same month a year ago.

However, the number-crunchers said the increase was softened by a £4bn downward revision to the total for the first six months of the 2019-20 financial year.

The ONS said borrowing in the seven months to date stood at £46.3bn.

That is £4.3bn more than in the same period in 2018-19.

The ONS figures showed falling corporation and income tax receipts last month but higher VAT and national insurance contributions.

Central government expenditure increased by £1.7bn to £66.8bn.

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The end of austerity has become a central theme of the election, with all the major parties planning to raise spending from current levels if they secure the keys to Number 10.

The Resolution Foundation think tank reacted to the ONS figures by claiming they would limit the ambitions of the victorious party.

Its research director, James Smith, said: “The 2019 public finances deterioration provides a sobering backdrop to manifesto launches this week, alongside a wider weaker outlook for both domestic and global growth next year.

“With all main parties committed to balancing the books on current spending, this deterioration should be a reminder to whoever wins the election that the state of the public finances will continue to be a constraint on plans for higher public service spending or tax cuts in the next parliament.”

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, predicted full-year borrowing should now hit around £45.6bn.

That would represent a slight fall on the previous financial year.

He wrote: “Looking ahead, scope remains for fiscal stimulus next year, regardless of which party wins the upcoming election.”