Autumn Statement: UK borrowing forecasts rise by £112bn

The Office for Budget Responsibility has revised public sector net borrowing forecasts even as Chancellor George Osborne proclaims the effect of falling gilt yields.

Osborne said lower borrowing costs meant debt interest payments over the course of the Parliament are now forecast to be £22bn less than predicted.

The Chancellor said borrowing by 2014 would be running at over £100bn more were it not for gilt yields touching record lows as investors' concerns focus on the eurozone.

But public sector net borrowing forecasts have been revised upwards to the tune of £112bn over the next four years.

The Office for Budget Responsibility now seeing borrowing requirements of £127bn for 2011/12, up from the £122bn forecast in March, with 2012/13 requirements rising from a March estimate of £101bn to a new forecast of £120bn.

Estimates have also been raised for the following years. Public sector net borrowing is now expected to come in at £79bn in 2014/15, up from £46bn, with 2015/16 borrowing rising from £29bn to £53bn.

A new forecast, for 2016,17, estimates borrowing of £24bn.