Public sector borrowing falls by £1bn in September Public sector borrowing for September fell by £1 billion on the same period last year, official figures showed today. The figure, which excludes the distorting effect of bank bailouts, dropped from £12.1 billion to £11.1 billion, the Office for National Statistics said. Meanwhile the ONS revised underlying borrowing for the 2012/13 financial year down slightly to £115.4 billion from a previous estimate of £115.7 billion. However the figures also showed public sector net debt at the end of September had climbed to £1.21 trillion, equivalent to 75.9% of the UK's gross domestic product. The public debt ratio of 75.9% is a new high, up from 74.6% in August and above the 74.8% recorded in December last year. This is despite the contribution of £586 million profit netted in the sale of part of the Government's stake in Lloyds Banking Group. The figure represented the difference between the £3.2 billion price at which the stock was sold and the £2.6 billion value which had been previously ascribed to it by the ONS. Tax receipts for September this year were up 7% to £44.8 billion compared to last year, including an 11% rise in income tax and capital gains tax collected, which reached £11.3 billion. There was a 7% rise in a separate income and wealth tax category mainly made up of corporation tax, to £2.6 billion. VAT receipts climbed 4.1% to £9.7 billion. Total government spending climbed by 2.5% in September compared to the same period in 2012, to reach £53.2 billion. Taxpayers spent £2.8 billion a month on debt interest - a fall of 5.3%, or £200 million, on last year. The independent Office for Budget Responsibility (OBR), set up to monitor the nation's finances, currently expects underlying public sector net borrowing to rise in the latest financial year to about £120 billion. The Treasury said the economy was "turning a corner" but Labour claimed that, while the fall was welcome, the Chancellor still looked set to borrow more than planned. James Knightley, of ING Bank, said the figures were "fractionally better than expected" and there were hopes for further improvement with the economy growing and the London property boom likely to raise the tax take from stamp duty. Howard Archer, of IHS Global Insight, said if current trends continued, underlying borrowing for the financial year would come in at around £105 billion, well below the £120 billion target. "Furthermore, the hope is that the trend in the public finances will increasingly improve over the coming months as improved economic activity increasingly feeds through to boost tax revenues and help limit benefit payments," he added. Martin Beck, of Capital Economics, said: "Although the economic recovery has taken its time to come though in the fiscal numbers, September's figures suggest that the public finances are now beginning to reap the rewards of a stronger economy." He pointed out that underlying borrowing fell to £56.7 billion for the first six months of the financial year, down 9.4% on the same period last year.