The extent of the British government's borrowing has been disputed by officials at The Treasury who believe that there is hysteria over inaccurate predictions over the level of government borrowing. Forecasts by city economistsÂ citing an overshoot in borrowing at anywhere between Â£200 and Â£220 billion have been strongly denied by The Treasury.
The Treasury believes the Â£175 billion borrowing figure will only be overshot by a few billion at most and the estimates by the city have been clouded by the surprise resurgence within the the stock markets, housing markets and the lower level of unemployment spoiling many predictions and the city's manoeuvres to position itself to deal with the forecastsÂ which have not materialised .
Many see this as posturing by The Treasury ahead of its pre-budget report and an annoyance when the true figures have not yet been compiled.
The is also much concern within the city on tax losses to the treasury from reduced wages, pay freezes, lower working hours and the depth of the recession.
The Treasury may be thinking that there may be a 'modest overshoot by a few billion', but a few billion is a huge number in real terms and must be paid back. Government Borrowing seems to be going up at a rate that will, in the end, require an eye-watering tax take to redress.
The markets have cottoned on to this and the Treasury are trying to make light of it. But if the City is right then we are in for a very rocky ride indeed. Not least that the rating agency Fitch has also warned that borrowing may lead to the UK losing its treasured AAA rating. Then the future borrowing will become at a very high cost.