Massive hole in government finances
Public finances have been pushed into the red by the biggest amount in almost six years due to increased public spending and lower returns from tax.
Last month, the public sector net cash requirement was £9.4bn, the biggest gap in its finances since March 1996.
As the government increases investment in the NHS, transport and education, its expenditure is growing at the fastest rate since 1992, an economist at Deutsche Bank said.
And according to John Butler of HSBC, government spending may have supported gross domestic product in the fourth quarter of 2001.
‘Without this boost, the economy may have actually contracted at the end of last year,’ Butler said.