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Last Updated: Thursday, 20 December 2007, 11:13 GMT
Key UK deficit widens to record
Analysts say the government may borrow more than it forecast
The UK's current account deficit, a key economic indicator, widened to a record level in the three months from July to September, official data shows.

The deficit was 20bn, or 5.7% of gross domestic product, compared with 13.7bn in the previous three months, the Office for National Statistics said.

Analysts also voiced concerns about the record level of government borrowing.

The data is evidence of a "dangerously unbalanced economy", according to Jonathan Loynes of Capital Economics.

In a monthly report on government financing, the Office for National Statistics said that public sector net borrowing hit a record 11.21bn in November.

Evan Davis
How does this play into the fragile state of our economic nerves?
Evan Davis,
BBC economics editor

Mr Loynes added that the borrowing figures suggested that the government was on track to overshoot its pre-Budget report forecast by at least 5bn this year.

"Overall, a pretty ugly picture, supporting our view that the coming economic slowdown will be a prolonged period of adjustment rather than a short pause for breath like that seen in 2005," he explained.

"What is really shocking about these figures is that they reveal that the Exchequer was running a large current deficit before the credit crisis hit home, when the economy was doing very well and it should have been showing a large current surplus," said Professor Peter Spencer, chief economic advisor to the Ernst & Young Item Club.

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