Personal Loans

Secured Loans

Other Loan Types

Residential Mortgages

Buy to Let Mortgages

Other Mortgage Types

Mortgage Payment Protection

Life Insurance

Other Finance

UK public finances in record shortfall

The UK's public finances fell further in December 2007, increasing the likelihood that the governments full-year borrowing targets will be overshot and limiting the chance to counter slowing growth.

The Office for National Statistics revealed public sector net borrowing was £7.9bn, higher than analysts' forecast, and the greatest December shortfall on record.

Furthar evidence of a motionless housing market came from the Council for Mortgage Lenders, their figured show that gross mortgage lending declined to £23bn in December, 21% lower than December the previous year and the weakest since May 2005.

The ONS said the public sector net cash requirement was £16.975bn, far beyond the expected £14.35bn.

Net borrowing for the financial year to December now totals £44bn, £11bn higher then the same period last year. The effects of the credit squeeze mean financial sector profits are to give less help to corporate tax receipts than usual.

Allan Monks, economist at JPMorgan said that even allowing for an improvement in January, net borrowing for the fiscal year is likely to overshoot its target by £4bn.

The growing strains on public finances leave the government little to spend its way out of an economic slowdown, even though it may be able to avoid a embarrassing breach of its own fiscal rules.

“The early stage of the economic cycle means that the fiscal rules are not a great constraint. Nonetheless, the figures underline the fact that there is little scope for a US-style fiscal stimulus to limit the downturn in the UK economy,” said Jonathan Loynes at Capital Economics.