UK Public Borrowing Too High At Start Of Crisis

The opposition Conservatives are likely to seize on King`s words as they have argued that Prime Minister Gordon Brown borrowed too much.

Britain entered the financial crisis with government borrowing that was too high and this had prevented it from boosting fiscal policy as much as other countries, Bank of England Governor Mervyn King said on Thursday.

The opposition Conservatives are likely to seize on King's words as they have argued that Prime Minister Gordon Brown borrowed too much in the good times and is therefore constrained in fighting the downturn.

"We entered this crisis with levels of public borrowing which were too high," King told a parliamentary committee. "We have not actually engaged in as big a fiscal relaxation as other countries in recognition of that fact."

King said it was wrong to say the current debt burden was unsustainable but noted that there would have to be some tightening at some stage which would not be comfortable.

"The Chancellor (of the Exchequer) has very clearly recognised that there will need to be a path of fiscal consolidation in the future. And it will take time. It won't be very comfortable and we will have to do it," King said.

"But it's a million miles away from saying we need fiscal consolidation to saying that the UK is like Zimbabwe and that we should go into administration. That is wholly irresponsible."

Public borrowing has risen sharply since the crisis started as tax receipts have slumped and the government has spent billions of pounds trying to prop the recession-hit economy and in bailing out the banks.

The government has forecast borrowing will reach 118 billion pounds, or some 8 percent of GDP, in the fiscal year starting April, and there has been speculation that the actual numbers could be much higher, especially if the budget unleashes another fiscal boost.

BoE Monetary Policy Committee member David Blanchflower called on Wednesday for a fiscal boost of as much as 90 billion pounds to stop unemployment soaring.