Public debt remains at a post-war record according to official figures released today, but the data also suggest the economy is stabilising, head of macroeconomics at PricewaterhouseCoopers(PwC) says.
The Office for National Statistics (ONS) public borrowing figures show a budget deficit for April-December 2009 of £120bn, compared to £64bn in the same period a year earlier.
Yet the latest monthly borrowing figure of £15.7bn for December was lower than expected.
Taken with the effect of the VAT rise and the improving trend in the economy and in City incomes, these figures suggests a total budget deficit for 2009/10 in line with the Treasury's £178bn forecast, according to PwC's John Hawksworth.
"Today's figures confirm other indications the economy is starting to recover and that tax revenues have begun to stabilise as a result.
"Receipts in the last three months of the financial year should be boosted both by the rise in VAT to 17.5% from 1 January and by tax payments on City bonuses that are likely to be higher than last year," he says.
However, he forecasts further tax rises and real spending cuts once the recovery is secure, over and above what has already been announced, to tackle the large structural deficit.
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