UK Aug public finances worse than expected

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LONDON, Sept 24 (Reuters) Both key measures of Britain's public finances swung into deficit in August, recording their worst readings for that month since records began, the Office for National Statistics said on Monday.

The Office for National Statistics said on Monday the public sector posted a net cash requirement of 5.004 billion pounds last month. That exceeded forecasts for a reading of 3.4 billion pounds and was the biggest deficit for a month of August since monthly records began in 1984.

The government's preferred accruals-based measure of borrowing came in at 9.072 billion pounds. This also exceeded forecasts for a reading of 6.0 billion pounds and was the highest borrowing for a month of August since records for that measure began in 1993.

August is traditionally a deficit month and the deterioration follows record July surpluses meaning the government's overall borrowing target of 34 billion for the full financial year may still be achievable.

The ONS also said that for national accounts purposes it would reclassify London Underground's PPP partners, Tube Lines and Metronet, from the private sector to the public sector taking effect from the dates in 2002 and 2003 when the companies signed their respective contracts with London Underground.

REUTERS PBB RN1454

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