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| UK government in borrowing record | UK government in borrowing record |
| (31 minutes later) | |
| The UK government borrowed a record amount last month, Office for National Statistics (ONS) data shows. | |
| Public sector net borrowing hit £8.092bn in September, up from £4.775bn in the same period a year earlier, marking a record for the month. | |
| The amount borrowed this financial year stands at £37.6bn so far - more than the total amount borrowed in 2007. | |
| The government has said it will keep investing money into public works to prevent a recession. | The government has said it will keep investing money into public works to prevent a recession. |
| On a net cash requirement basis the government borrowed £12.65bn last month, compared with a deficit of £8.72bn in the same period a year ago. | |
| The public finances are in a complete state and in much worse shape than a year ago Ernst &Young Item Club This was also more than expected; analysts had forecast that public borrowing would reach around £10.1bn in September. | |
| The cumulative borrowing for the period from April to September of £37.59bn is up from the £21.46bn borrowed in the same period a year earlier and represents the largest total for a six month period since records began in 1946. | |
| "It confirms what we pretty much all know," said Paul Dales, an economist at Capital Economics. | |
| Borrowing is set to surge and rise dramatically in the current financial year". | |
| Slowdown | Slowdown |
| The figures come a day after Ernst & Young Item's Club said the UK economy was already in a recession and would see the economy shrink by 1% next year, before growing by 1% in 2010. | The figures come a day after Ernst & Young Item's Club said the UK economy was already in a recession and would see the economy shrink by 1% next year, before growing by 1% in 2010. |
| In response to the latest figures the Item Club said: "The UK's public finances are in a complete state and in much worse shape than a year ago". | |
| Figures later this week are expected to show that the UK economy shrank in the third quarter - the first contraction since 1992. | |
| Chancellor Alistair Darling had forecast in his Budget statement in March that public sector public borrowing for the full financial year - up to April 2009 - would reach £43bn. | |
| But the Item Club believes borrowing will reach £60bn in the financial year 2008-09, with a current budget deficit of £27 billion, "much higher than the government's own projection". | |
| In light of this, the club said it was clear "substantial revisions will be necessary in the Pre-Budget Report." | |
| Unemployment is already rising and forecast to continue doing so, which will will add further pressure on the government's finances. | Unemployment is already rising and forecast to continue doing so, which will will add further pressure on the government's finances. |
| And recent data has underlined the weakness in the housing sector; mortgage lending fell to its lowest level for more than three and a half years in September, according to the Council of Mortgage Lenders. | |
| Intervention | |
| The UK government recently took emergency steps to shore up the banking system in a bid to increase liquidity and stabilise the markets. | |
| Other nations have taken similar moves: | |
| • Sweden became the latest European government to announce a bank rescue plan. Its $205bn package included credit guarantees and a bail-out fund • Dutch banking and insurance company ING is to receive a 10bn euro ($13.4bn; £7.7bn) government cash injection | |
| • South Korea revealed its own financial sector rescue package, worth $130bn. |