UK hits £126bn borrowing target for 2011

The UK government managed to keep public spending within its target range in 2011, although borrowing in March was more than expected

by Michael Northcott
Last Updated: 19 Aug 2013

As markets react badly to political developments in Europe, the Office of National Statistics (ONS) has announced that whilst spending in March 2012 was higher than expected, at £18.2bn, the country actually hit its borrowing target of £126bn for the full year. One year of austerity down, five to go. 

The figures mean that total public borrowing was down £11bn on the £136.8bn borrowed in 2010-2011. This is great news for George Osborne, whose hard line on austerity has been met with hostility from elsewhere in the political landscape. This spending leaves net national debt at £1022.5bn, equivalent to 66.0 per cent of GDP.  The government’s plan to eliminate the deficit by 2016-17 appears to be bearing some fruit. 

The news comes as markets took a battering because of doubts about the eurozone. Wall Street fell 0.8%, German shares fell 3.4%, French stocks dropped 2.8% and UK stocks dropped 1.9%, following concerns over the resignation of the Dutch prime minister, Mark Rutte, and François Hollande’s first round victory in the French presidential elections. What will happen to the Franco-German ‘Merkozy’ euro-consensus if a socialist winds up as French president? We don’t know, but the bond markets at least are unlikely to react well…

So the borrowing figures are encouraging, but the UK economy is heavily reliant on international trade and is not insulated from major wobbles in global markets. If the eurozone falls off a cliff, our austerity plans may turn out to have been in vain. 

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Leadership lessons from Jürgen Klopp

The Liverpool manager exemplifies ‘the long win’, based not on results but on clarity of...

How to get a grip on stress

Once a zebra escapes the lion's jaws, it goes back to grazing peacefully. There's a...

A leadership thought: Treat your colleagues like customers

One minute briefing: Create a platform where others can see their success, says AVEVA CEO...

The ignominious death of Gordon Gekko

Profit at all costs is a defunct philosophy, and purpose a corporate superpower, argues this...

Gender bias is kept alive by those who think it is dead

Research: Greater representation of women does not automatically lead to equal treatment.

What I learned leading a Syrian bank through a civil war

Louai Al Roumani was CFO of Syria's largest private retail bank when the conflict broke...