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Public sector borrowing falls in 2013-14

Public sector net borrowing fell to £107.7bn in the last financial year to April 2014, a £7.5bn decrease compared to the same period 12 months earlier, according to figures from the Office for National Statistics (ONS). 

Additionally, in March 2014, underlying public sector net borrowing was £6.7bn, £4.7bn lower than in March 2013. Estimates for borrowing in both January and February have also been revised down by the ONS today, by £800m and £500m respectively. 

The latest figure excludes the effects of both the transfer of the Royal Mail pension scheme to the government, and gains from the Bank of England's asset purchases for quantitative easing (QE). 

The UK's public sector net debt, excluding financial interventions, is now £1,268.7bn, equivalent to 75.8% of GDP. This compares with a figure of £1,185.2bn, or 74.2% of GDP, at the end of March 2013. 

David Kern, chief economist at the British Chambers of Commerce (BCC), said: “The figures show that gradual progress has been made over the past year in stabilising our public finances. 

“However bringing down our budget deficit remains a difficult task. Since the financial crisis we have seen falls in oil and gas output and weaknesses in the financial sector. These structural changes have reduced the country’s ability to generate tax revenues, and future public spending must factor in these challenges. 

“Although progress may be gradual, reducing our public sector debt is necessary, as it will help businesses drive the recovery, and create jobs and wealth.” 

In the Budget, the Office for Budget Responsibility (OBR) had estimated a deficit for the full year of £107.8bn. A government spokesman said the figures were evidence that the coalition’s long-term economic plan was working. 

The spokesperson added: “Public sector net borrowing in 2013-14 was over 10% lower than forecast at last year’s Budget [which forecast £120bn], and the deficit has fallen by over a third. 

“But the job is not yet done and there is still much more to do to build the resilient economy the chancellor spoke of at the Budget.” 

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