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Borrowing up £7bn in 2012

Borrowing up £7bn in 2012

The Prime Minister remains of the view that the economy is "healing", despite new figures showing the Government borrowed £7.2bn more last year than in 2011.

The latest round of disappointing data could put more pressure on the UK's AAA credit rating, with agencies already putting Britain on a negative outlook.

But the Prime Minister's spokesman this morning played down the news, saying:

"He takes the view that the economy is healing. My understanding is that the figures are broadly in line with market expectations. The Office for Budget Responsibility forecasts the deficit and its forecast in this financial year is that it is to fall."

The figure for December was slightly higher than expected, with borrowing up £0.6bn year-on-year to £15.4bn, with total public sector net debt now equivalent to 70.7% of GDP.

Responding to the figures, Labour's Rachel Reeves accused the Government of "failing on the one test they set themselves – to get the deficit and debt down".

In a separate development, George Osborne told Cabinet today that a budget-setting process for the year 2015-16 will be set out in the first half of this year.

The Prime Minister's Official Spokesman emphasised the "importance of departments continuing to and stepping up engagement with the Treasury and the Cabinet Office Efficiency and Reform Group."

He also revealed "there was an agreement around the Cabinet table that though the decisions that will have to be taken are difficult they will have to be made".

Green Box: Borrowing up £7bn in 2012Click to open

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