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PRE-BUDGET REPORT: Public borrowing to reach record highs

Chancellor of the Exchequer Alistair Darling said today’s Pre-Budget Report represented a £20 billion stimulus for the economy, but he admitted he will borrow to fund it.

Public sector borrowing will more than double to £78 billion this year and increase further to £118 billion for 2009/10 before coming down to £105 billion the year after with steady reductions thereafter.

Mr Darling said it would be “perverse and damaging” to stick to Government borrowing rules of now more than 40 per cent of GDP in the current crisis so they would be temporarily suspended.

The borrowing next year will represent 57 per cent of GDP.

But Mr Darling said the books would be balanced again by 2015/16.

Click here for a full summary of the Pre-Budget Report 2008.