The British government is set to miss its borrowing targets for 2016

The British government looks set to miss its borrowing targets, after the release of official figures for January.

Overall borrowing for the fiscal year reached £66.5 billion in January, excluding the borrowing of state-owned banks like Lloyds. This was a fall of £10.6 billion from the same time last year.

Although borrowing fell in January, chancellor George Osborne has little hope of reaching the borrowing prediction of the Office for Budget Responsibility — the independent body tasked with ensuring that the government is prudent with its money.

The OBR estimated that government borrowing for 2015-16 would be £68.9 billion, excluding the state-backed banks.

As Pantheon Macroeconomics puts it in a note this morning:

Borrowing remains on course to overshoot the Office for Budget Responsibility’s — OBR’s — forecasts, despite the better figures for January. Income tax receipts were 4.7% higher year-over-year in January, thanks to a bumper batch of self-assessment receipts. But poor tax receipts in prior months mean that borrowing has totalled £66.5 billion so far this fiscal year, only 13.7% less than in the previous year.

The OBR predicted that full-year borrowing, including housing associations which have been incorporated into the official figures for the first time, would be 22% lower this year. Barring revisions, he can borrow only £7 billion in the last two months of the fiscal year if he wants to meet the Autumn Statement forecast, a feat not seen since 2003/04.

As Pantheon points out, there have been some big changes in the government’s overall debt pile after the inclusion, in October, of a huge chunk of housing association debt in government figures. Housing associations were officially classified as public sector bodies under the changes, adding roughly £60 billion to the government’s debts, although OBR figures did take these changes into account.

Elsewhere, Britain just announced its biggest January budget surplus since before the financial crisis after government figures showed a fall of £10.6 billion in the amount borrowed, and an overall surplus of £11.2 billion.

That represents a big jump from the same period in 2015, when the January surplus was just £10.2 billion, and a huge jump from December when the government achieved a surplus of just £7.5 billion.

Despite the jump, the figures were disappointing, missing the forecasts of economists who predicted that Britain would achieve a surplus of £12.3 billion in January.

NOW WATCH: JEFF SACHS: This is the biggest threat to the human race

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.