Government Borrowing Increased By £0.7bn In August

Public sector net borrowing excluding public sector banks (PSNB ex) in August 2014 was £11.6bn, £0.7bn up on August 2013 according to statistical data from the ONS. The current budget deficit was £9.4bn and net investment was £2.2bn. PSND ex was £1,432.2bn, up £96.7bn compared with August 2013. Net borrowing from April to August 2014 increased £2.6bn to £45.4bn compared with the same period in 2013.

Government borrowing can be further broken down sectorally, general government accounted for £12.8bn of which central government accounted for £10.9bn and local government £1.9bn, public non-financial corporations -£0.1bn and the Bank of England -£1.1bn. Public financial corporations accounted for -£0.8bn and PSNB was £10.9bn.

Central government net cash requirement from April to August was £33.4bn up £5.6bn compared with 2013-14.

Governmemt Borrowing Down By £8.1bn

Public Sector Net Borrowing (PSNB) for the financial year 2013-14, excluding the temporary effects of financial interventions, the transfer of the Royal Mail pension plan, transfers from the Bank of England Asset Purchase Facility, was estimated to have been £107.0bn. The figure for the same period in 2012-13 was £115.1bn a difference of £8.1bn. PSNB ex was £94.9bn.

Public Sector Net Borrowing (PSNB) for May, excluding the temporary effects of financial interventions, the transfer of the Royal Mail pension plan, transfers from the Bank of England Asset Purchase Facility, was estimated to have been £13.3bn. In May 2013 borrowing was £12.6bn, a difference of £0.7bn. PSNB ex was £13.3bn. The PS current budget for May was -£11.8bn and PS net investment was £1.5bn.

The sectoral breakdown of PSNB shows that general government borrowing was £13.4bn of which central government accounted for £12.5bn, local government £0.9bn and non-financial public corporations -£0.1bn.

Central government net cash requirement for 2013-14 was £75.4bn, £29.6bn lower than in 2012-13 when it was £105bn. PSND for May was £1284.5bn or 76.1% of GDP.

Government Borrowing £0.2bn Lower Than Last Year

The latest figures from the ONS on public sector finance suggest that in October 2013, public sector net borrowing excluding the effects of financial intervention (PSNB ex) was £8.1bn. General Government borrowing totalled £8.2bn of which central government accounted for £7.7bn and local government £0.5bn. Non-financial public corporations reported -£0.1bn of borrowing. Public sector net debt (PSND) was £1207.2 or 75.4% of annual GDP. The public sector current budget was -£5.7bn and public sector net investment (PSNI) was £2.3bn.

UK Companies Are Maintaining Profitability

The profitability of UK non-financial corporations in Q2 2013 as measured by net rate of return (NNR) was estimated by 11.4% according to the ONS. It compares well with the last 18 months but is lower than 2011. The revised estimate for Q1 was 11.3%.

The manufacturing sector reported net rate of return of 7.2% in Q2 2013 one of the lowest levels since 2003. Services NRR was estimated to have been 15.1% in Q2 equal to Q1 but higher than the last two and a half years. UK continental shelf companies (oil & gas) NRR, which are not directly comparable with other industrial sectors and can be very volatile, grew by 37.4%. Non-UKCS companies grew by 10.7%.

Putting it into context, real GDP grew by 0.7% in Q2 2013 and the NRR of UK companies was 11.4%, an increase of 0.1%. The operating profits of UK non-financial corporations increased by 1.2% (according to Quarterly National Accounts) suggesting that profits are increasing at a faster rate than capital employed.

Government Borrowing Down £1.3bn

The key measures of the public sector finances published by the ONS show that in August 2013 public sector net borrowing was £13.2bn, £1.3bn lower than in August 2012 when it was £14.4bn. This is because the public sector current budget was -£11.2bn and public sector net investment was £1.9bn. Public sector net debt was £1,193bn or £74.6% of annual GDP.

The sectoral breakdown of public sector borrowing (PSNB) shows that in August 2013 general government borrowing was £13.8bn of which central government accounted for £12.7bn and local government £1.1bn. Non-financial public corporations accounted for -£0.6bn and gives the PSNB figure of £13.2bn.

The central government net cash requirement (CGNCR) was £9.1bn, £0.6bn up on last year. The CGNCR for the 6 months from April to August 2013 was £26.4bn, 12.6% or £3.8bn lower than in the same period the previous year.

These figures exclude the temporary effects of financial intervention.