UK government borrows more than expected

Latest report from Office of National Statistics (ONS) shows that public-sector net borrowing in the UK (excluding banks) rose to £12.1 billion in August, while economists expected that it would come in at a lower level of £9.2 billion. Figure, released by the ONS higher than £1.4 billion compared August 2014.

However, in current financial year from April, borrowings are less by £4.4 billion to £38.4 billion, compared to the same period in 2014.

UK government is trying to balance its budget and expects it to move into surplus over the next 4-5 years.

Treasury has declared though they have managed to shrink the deficit by almost 50%, there are rooms for further reduction.

UK's government has remained in favor this year as one hand Bank of England (BOE) signaled rate hike possible next year.

Shorter end of the debt has remained well bid as treasury has declared it will be issuing lesser shorter term debt, while moving to longer end of the curve.