Yet another unwanted record for the UK's public finances: the Government was forced to borrow £11.4bn last month to cover its budget deficit, the highest October figure since records began. This is bad not only because it pushes Britain's net debt to a mind-boggling £830bn (prompting more dire warnings from the OECD), but also because October is usually a pretty good month for the public finances. In fact, last year we were only short of a piffling £100m - which means that this year the Governement has had to borrow 114 times as much money as last year. Oh dear.
The main problem, you won't be surprised to learn, is that spending is shooting up, and taxes are plunging down. Normally October is a strong month for corporation tax receipts, but that only works when companies are actually making profits; this year, the overall tax take shrunk by a whopping £4.1bn. Meanwhile the Government splashed out an extra £4.5bn, largely on welfare payments. Together, this transformed a relatively tiny deficit into an extremely large and painful one.
The OECD (the Organisation for Economic Co-operation and Development to its Mum) is particularly worried about our mammoth debt pile, which now stands at 59% of GDP (that's up from 49% this time last year, thanks largely to the banks - although it's worth pointing out that this is still much lower than some big economies). Not unreasonably, it wants the Government to come up with a credible plan for balancing the books (as opposed to printing money to buy its onw debt, which is basically what QE is doing). Either way, it thinks the need for tax hikes and spending cuts will constrain the recovery next year, and it's also reduced its forecast for this year, to a 4.7% decline.
And for yet another illustration of what all this means in real terms, look no further than PwC’s latest Global Economic Crime Survey. Apparently 40% of firms say they’ve fallen victim to fraud and theft in the last year; and most are pointing the finger of blame squarely at those traditional corporate scapegoats - middle-managers, who are apparently now committing almost half of these offences (although we're not sure we buy this - CEOs are hardly going to admit fraud to PwC, are they?). Under huge amounts of pressure, in constant fear of redundancy, and envious of their superiors’ hefty pay packets, PwC claims many are convincing themselves that it’s ok to break the rules. And their stretched employees just don’t have the resources to fight back. All a bit depressing really, isn’t it?
In today's bulletin:
Bolland goes out with a bang as Morrisons cashes in
Britain pays recessionary price - and managers turn to crime
MT EXCLUSIVE: In-depth profile of new Marks and Spencer boss Marc Bolland
Number of female FTSE directors flat-lines
A Traveller's Tale: Better times in Paris