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City awaiting borrowing figures
Chancellor George Osborne's hopes of hitting a full-year target for reducing the budget deficit are hanging by a thread ahead of official figures.
The Office for National Statistics (ONS) is expected to reveal that public sector net borrowing excluding financial interventions such as bank bail-outs came to £16 billion in March - £2 billion lower than the previous year.
That would leave borrowing for the year to the end of March at £126 billion - lower than last year's figure of £136.8 billion and exactly hitting the target forecast by the independent watchdog the Office for Budget Responsibility (OBR).
However, Vicky Redwood, an economist at Capital Economics, expects borrowing for March to come in at £18 billion, flat with last year, which would mean the Chancellor has missed the target by £2 billion.
And she said there was a risk that borrowing could be even higher than last year if public sector spending was driven up as departments tried to use up their budget before the end of the financial year.
She said: "Of course, the big picture is still that borrowing in 2011/12 will have been much lower than the £137 billion seen in 2010/11. Nonetheless, we think that it will be hard to make further downward progress if the economic recovery stumbles again as we expect."
The Government has been successfully bringing down the deficit for most of the year but February saw a £15.2 billion jump in net borrowing, which was a record for the month and was much higher than the £8.9 billion last year.
Spending was higher than forecast and with the UK's economy teetering on the edge of recession, tax returns proved weaker than had been hoped.
But Philip Shaw, an economist at Investec, thinks the Government's plans will get back on track in March. He predicted borrowing of £14.6 billion for the month, comfortably below the OBR's full-year target.
He added: "Providing the economy gains some momentum, there should also be an improvement in the underlying fiscal position this year, albeit a modest one."