It's getting more expensive

The government budget debt figure for December 2008 has recently been announced.

In December government expenditure exceeded government income by £11.4 billion. This is equivalent to about 4p on standard rate income tax.

This figure will get larger as companies fold, the unemployed stop paying tax and as the government has to pay benefits to more and more unemployed. It begins to look as if the chancellor was over-optimistic on how soon recovery will begin and also how deep it is becoming.
He expected to have a deficit for the year April to April of £70 billion or so. It now begins to look much more.

Of course, government taxation receipts do not flow in regularly and it is possible that January's figure will be a reduction on this dreadful figure, but it is a sign of the debt will rack up even without wild spending by G. Brown to save his reputation. I blogged yesterday on the level of present total indebtedness as a percentage of GDP. December's figure was expected to be high, but not as high as £11.4 billion, so it may be that the chancellor was much more optimistic than we thought.

Those who have been expressing concern about the level of indebtedness, the possible collapse of sterling and national "bankruptcy", have every justification. Individuals and institutions are clearly concerned about our economy, but more important the markets, including those whose income depends on accurate forecasts, are beginning to have doubts about our future.