Public sector borrowing in the U.K. jumped GBP 16.1B in August amid forecasts for a GBP 12.5B rise, and is up from GBP 9.9B in the previous year. Government spending jumped GBP 45.6B during the month while inflows slumped 9.1% from the previous year to GBP 34.1B, which raised the public debt to GBP 804.8B, 57.5% of GDP. As policy makers attempt to steer the nation out of the worst recession since the post-war period, the credit rating outlook for the U.K. remains bleak as Standard and Poor’s sees a risk for the nation to lose its AAA rating, and fears of a slower recovery may continue to drag on the exchange rate as investors weigh the outlook for future policy.
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