Britain’s battered public finances received a welcome boost last month as proceeds from the 4G mobile auction helped government borrowing fall by £9 billion.
The Office for National Statistics said public sector net borrowing, excluding financial interventions such as bank bailouts, fell to £2.8bn last month from £11.8bn a year earlier.
Higher tax receipts helped fuel the fall, but the biggest impact came after the government received a £2.3bn haul from the 4G airwaves auction and also thanks to a further £2.7bn in interest from the Bank of England’s asset purchase programme.
The borrowing figure – the lowest for February since 2008 – provides a lift after Wednesday’s Budget revealed the Treasury would have to borrow nearly £60bn more than originally forecast by 2017-18.
Howard Archer, chief UK economist at IHS Global Insight, said the Chancellor may be on course to undershoot his current-year borrowing target thanks to a “genuinely decent figure for February”.
Meanwhile, there were signs of recovery in the embattled manufacturing sector after the CBI’s latest industrial trends survey showed output expectations surging to their highest in almost a year.
HOLLY WILLIAMS AND SCOTT REID
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Tuesday 21 May 2013
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