Economy 21 February 2013 Public sector borrowing on course to overshoot OBR projections by £11bn ONS reports a stronger January than last year, but the trend remains poor. Print HTML The ONS has released the public sector finances for January 2013, showing that the government ran a surplus of £11.4bn in the month, £5bn higher than in January 2012. But as Nida Ali, economic advisor to the Ernst & Young ITEM Club, comments, the good news is largely a mirage: Today’s figures demonstrate the problems caused by all of the statistical fudges of the past couple of years – the various transfers from the Bank of England, Northern Rock and Bradford & Bingley make it virtually impossible to decipher the underlying trend. Although January’s headline number looks encouraging, it appears that the state of the public finances is worse than the government and the OBR had hoped for. Stripping out the one-off factors, net borrowing in the financial year-to-date is £7.5bn higher than last year. With just two months of data pending and last year’s deficit having been revised down, there is virtually no chance of borrowing being lower on a like-for-like basis in 2012/13 than in 2011/12. Furthermore, the ONS has put a ceiling of £9.1bn on the amount of cash that can be transferred from the Central Bank to the government in 2012/13. Given that this also includes the payment from the Special Liquidity Scheme, it means that the reduction in borrowing caused by the transfers from the Bank of England’s Asset Purchase Facility will be £5bn less than the OBR had forecast. However, even accounting for this setback and the lower than expected 4G proceeds, the government was still on course to miss the OBR’s 2012/13 borrowing forecast by a distance. Assuming that borrowing in the final two months of the financial year is the same as it was last year, the government is on course to overshoot the OBR’s 2012/13 forecast of £80.5bn by almost £11bn. An £11bn overshoot even of the OBR's already depreciated forecast will be bad news indeed for the Chancellor. But the deficit is, at least, on course to be lower than it was last year; and January itself was strong, as the chart below shows: Cumulative public sector net borrowing by month, excluding the temporary effects of financial interventions Good news this month, then — but it only highlights how bad the news has been for the rest of the year. › What went wrong with the Playstation 4 launch? Photograph: Getty Images Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter. From only £1 a week Subscribe More Related articles Theresa May's speech: if immigration is so bad, you've got to leave Europe George Osborne’s love bombing of Labour voters should terrify the opposition If George Osborne was going to take Labour’s infrastructure idea, why did he wait two years?