Osborne to bump up UK borrowing target by 5 billion pounds - Reuters poll

By Andy Bruce LONDON (Reuters) - British finance minister George Osborne will have to borrow 5 billion pounds more this financial year than he planned in July, according to a Reuters poll conducted before a budget statement he is due to deliver on Wednesday. Government borrowing in the 2015/16 financial year is 11 percent less than it was at the same point in 2014, but progress in cutting the deficit has been slower than Osborne might have hoped, in part reflecting slower economic growth mid-way through the year. Strategists and economists polled by Reuters generally think the government is unlikely to achieve its target of cutting headline borrowing to 69.5 billion pounds this financial year, part of a plan to return the budget to a surplus by the end of the decade. Osborne is likely to announce a new, higher target for public sector net borrowing, excluding banks, of 74.7 billion pounds, according to the median finding from a poll of 11 analysts - who stressed the final figure was still far from clear. Local government borrowing, responsible for much of the overshoot this year, can be subject to large revisions. And a reclassification of housing associations into the public sector is also likely to bump up the Office for Budget Responsibility's estimate of headline public borrowing. The Office for National Statistics said such a change, had it been introduced in the 2014/15 financial year, would have increased the deficit by around 4.5 billion pounds. The government's central government net cash requirement is likely to increase by around 3 billion pounds, according to the poll. Most strategists expect this will be financed with sales of extra treasury bills rather than gilts. Still, strategists at UBS said this was not the case the last time Osborne had to announce a higher borrowing forecast in an autumn budget statement. "In November 2011, there was a 13.8 billion pound rise in the funding remit announced by the Debt Management Office, of which 11.4 billion pounds was financed by an increase in gilt supply," they said. (Reporting by Andy Bruce; editing by John Stonestreet)