Borrowing leaps to £16.5 billion

The UK suffered a surprise rise in borrowing last month to £16.5 billion, official figures showed today.

But the £900 million rise compared with last year was driven by the timing of payments to local authorities which sharply increased local government borrowing over the month, statisticians said.

Borrowing for the eight months of the financial year so far is running 2.2% below last year at £84 billion as growth improves the public finances. Total tax receipts are up 6.9% this year compared with a much slower 1.8% rise in spending.