Worst October Borrowing Figures Since 2009

Figures confirming the highest level of Government October borrowing for six years have placed greater pressure on George Osborne, ahead of key spending announcements next week.

The Office for National Statistics (ONS) said public sector net borrowing, excluding the effects of bank bailouts, rose last month by £1.1bn on the same month last year to £8.2bn.

Economists had been predicting a figure of £6bn.

It meant borrowing was at its highest October level since 2009 - pressuring the Chancellor's official borrowing target of £69.5bn for the financial year to April 2016.

Borrowing between April and October stood at £54.3bn - 11% down on the same period in 2014/15.

Nevertheless, economists expect the performance to result in the independent Office for Budget Responsibility (OBR) raising the borrowing target next Wednesday, when Mr Osborne outlines his spending priorities for the current Parliament.

The adjustment could take the target above £80bn - if current OBR rolling forecasts are taken into account.

Mr Osborne is relying on stronger tax receipts from an economy with record employment and rising wages to help keep borrowing in check.

Headwinds include not only an easing of UK economic growth but also higher costs to service debt.

The Treasury responded to the ONS figures by saying they showed that the job of fixing the public finances was not yet completed as it aims to run a budget surplus by 2019/20.

The Spending Review and Autumn Statement will detail how Government departments aim to save £20bn over the next four years - with ministers facing pressure on tax credits in particular.

Mr Osborne was forced to delay his programme of cuts - pending changes to improve support for the poorest - after the plans were defeated by the House of Lords.

But he told Sky News he was determined to implement reforms as part of his aim to deliver a low-welfare, high-wage economy.