"With borrowing still at very high levels, next week's spending review is a reminder of how much austerity still lies ahead"
- Vicky Redwood, chief U.K. economist at Capital Economics Ltd.
Britain's public sector net borrowing that exclude financial interventions, reached £8.8 billion last month, less than initially expected, affected by multi-billion pound cash transfer to the Treasury. Analysts, however, expected a £12.6 billion figure. According to the report from the Office for National Statistics, the first tranche of money total £3.9 billion was transferred from the BoE's Asset Purchase Facility Fund, while the second transfer estimated £3.2 billion from one-off tax payments by banks from Switzerland.
During the 2012-2013 year public sector borrowing stood at £118.8 billion, up from £118.5 a year earlier. At the same time, public sector net debt, which is considered as a measure of the total amount the nation owes, jumped to £1.19 trillion, compared with £1.1 trillion a year ago. It means that the total debt has now surged to 75.2% of the nation's gross domestic product, up from 71.1% of GDP at the end of May 2012. Recent figures are adding pressure on Chancellor George Osborne, before the next Wednesday's meeting in regards with the government's spending for the 2015-2016 financial year. Meanwhile, Osborne has managed to save only £3.6 billion of the required figure and still needs to reach an agreement with the nation's Ministry of Defense, amid concerns that further cuts are likely to jeopardize front-line capabilities.
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