After two heavy months, public sector borrowing fell back sharply in December, to its lowest seasonally-adjusted level since November 2008 – see chart. If the adjusted run-rate in the final quarter of 2010-11 matches the average for the first nine months, full-year borrowing will be £146 billion, below the Office for Budget Reponsibility's November forecast of £148.5 billion. A larger undershoot, indeed, is possible, partly reflecting additional receipts from the VAT hike to 20% (forecast to raise £2.85 billion in 2010-11).
