Britain's public sector net borrowing in the last fiscal year surged to a nine-year high but spared Chancellor of the Exchequer Gordon Brown embarrassment as it undershot his budget forecast. The Office for National Statistics said on Thursday full-year public sector net borrowing in 2003-04 was 34.8 billion pounds compared with the 37.5 billion pound figure that Brown forecast just over a month ago in the budget. Still, the figures are nearly eight billion pounds higher than forecasts the Chancellor made a year ago and show a bleak picture of the public finances even as revenues rise from a now-booming economy. "Today's borrowing figures suggest plenty of supply going forward," said Marc Ostwald, bond strategist at Monument Securities. British gilts did not react to the data even though the number indicated there could be more supply than expected in the pipeline.
PSNB, which is an accruals measure of the public finances, was 6.2 billion pounds in March, below consensus forecasts for 6.5 billion pounds. The ONS also said the public sector net cash requirement for the full year 2003-04 was 39.9 billion pounds, the highest since 1993-94 when it was 46.1 billion. The March PSNCR rose more than expected to 14.9 billion pounds, the highest since records began in 1984 and worsened despite a pickup in tax revenue as government spending surged. Forecasts were for 12.0 billion sterling. A spokesperson for the UK Treasury said that the figures show that the government "remains firmly on track to meet its strict fiscal rules."///