Osborne borrows his way out of a debt crisis

This morning’s borrowing figures from the Office for National Statistics are a blow for George Osborne, showing public sector borrowing up £2.7bn on the same time last year. The stats show the government borrowed £17.9bn in May, while the 2011-12 deficit is now £127.6bn, up £3.2bn. Labour have seized on the figures, saying it’s the ‘nail in the coffin of David Cameron and George Osborne’s failed economic plan’. It’s worth remembering, though, that Labour would be borrowing even more in this Parliament than the Coalition is, with the Institute for Fiscal Studies estimating that under Labour, borrowing would be closer to £76bn in 2016-17 than the £26bn forecast in the March Budget.

Sniping about who would be borrowing more aside, that increased figure for the deficit is hardly going to overjoy Conservative MPs, who are growing increasingly concerned about the pace of deficit reduction and a dearth of supply-side reform to get the economy moving.