Michael Gove launches extraordinary attack on ‘arrogant’ Bank of England governor Mark Carney, comparing him to ‘dart throwing chimp’
Britain’s debt rocketed last month in a shock 14.5 per cent surge in government borrowing.
The shock figures came as Michael Gove has launched an extraordinary attack on “arrogant” Bank of England governor Mark Carney, comparing him to a “dart throwing chimp”.
Chancellor Philip Hammond has signalled the Treasury will take advantage of the cheap cost of borrowing to boost investment into the UK, in a departure from his predecessor George Osborne.
But experts warned today that budget deficit had "virtually halted" and targets are set to be missed.
Public sector net debt climbed by £39.5 billion to £1,627.2 billion last month, the equivalent to 83.3% of the country’s annual output.
The Government surprised economists by borrowing a higher-than-expected £10.6 billion in September.
In his latest attack on “experts", Brexit backing former Cabinet Minister Michael Gove hit out at Bank boss Mr Carney had failing to correctly predict economic downturns.
Mr Gove added “any criticism of his actions is regarded as a thought crime”.
He accused the Canadian banker of acting like an evil Ming emperor who “flayed alive” anyone who “dared to question his rule”.
Mr Gove added: “Mark Carney may be many things but — like the rest of us — he is neither always infallible nor truly independent.”
Writing in The Times, Mr Gove hit out at Mr Carney’s: “attitudes and prejudices reflect a career in Goldman Sachs and the biases current among central bankers.”
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Expert economists had were pencilling in a figure of £8.5 billion for September’s borrowing figures.
But the ONS said September's borrowing rise was driven by an increase in net borrowing from central and local government, which stepped up by £1.3 billion and £300 million respectively.
It came despite central Government tax receipts rising 2.6% - or £1.2 billion - to £49 billion last month, compared with September 2015.
National Insurance contributions rose by 8% - or £700 million - to £9.8 billion over the period, while VAT receipts lifted by 1.4% - or £200 million - to £11.1 billion.
It helped to offset an 8.7% - £200 million - drop in corporation tax receipts to £2.3 billion.
Central Government spending jumped 4.3% - or £2.4 billion - to £57.2 billion last month, compared to September 2015.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said progress the Government had made in driving down the budget deficit had "virtually halted".
"With the budget deficit set to equal about 3.5% of GDP this year and likely to rise next year as the economy slows, and the sharp rise in gilt yields underlining that investors' confidence is fraying, we expect the Chancellor to be cautious," he added.
John Hawksworth, chief economist at PwC, said: "Today's public borrowing figures were a bit of a cold shower for the Chancellor after the recent run of generally favourable post-referendum economic data."
He said it was looking increasingly difficult for Mr Hammond to meet the Office for Budget Responsibility's forecast from March, which suggested total public sector borrowing would hit £55.5 billion for 2016/17.
It would mean borrowing for the second half of the year would have to come in at just £10 billion.
"A more likely outcome based on the available data is that the budget deficit this year will come in at around £65 to £70 billion," he added.
"We would not, however, expect the Chancellor to take any immediate action in the Autumn Statement to correct this budget deficit overshoot, as this could be counter-productive and further weaken the economy."