Public sector net borrowing excluding the temporary impact of financial interventions (PSNB ex) rose to £16.2 billion in September from £15.5 billion a year earlier. Incorporating a £0.7 billion downward revision to earlier months in 2010-11, however, borrowing still looks on course to undershoot the Office for Budget Responsibility's (OBR) full-year forecast of £149 billion.

The chart shows a crude attempt to adjust the monthly numbers for seasonal variation: adjusted borrowing averaged £11.75 billion in the first six months of the fiscal year, or £141 billion annualised – see chart. The OBR forecast, therefore, implies renewed deterioration over the remainder of 2010-11. This is unlikely because the benefits of economic recovery should grow as the year progresses while much of the £8.1 billion of spending cuts and tax rises announced since the election has yet to take effect.

Central government current expenditure rose by 6.8% in the six months to September from a year earlier, above the OBR's projection of full-year growth of 5.6%. This was more than offset, however, by a 9.2% increase in current receipts, versus a 6.5% full-year forecast.

The figures also indicate that capital spending has yet to be reined back. Public sector net investment was little changed in the six months to September from a year earlier, implying a drastic cut over the remainder of 2010-11 to achieve the OBR projection of a 21% full-year reduction.