Latest Public Sector News

21.08.12

UK borrowing rises in July – ONS

A surprise rise in UK borrowing has been reported by the ONS, as corporation tax receipts fell in July.

Excluding the bank bailouts, public sector net borrowing was in deficit by £557m; economists were expecting a surplus of £2.2bn to £2.5bn. There was a £2.8bn surplus in July 2011.

Government spending increased by 5.1% and net borrowing for April to June was revised up by £1.4bn.

Borrowing for this year to date is £44.9bn, £9.3bn higher than a year ago.

Public sector net debt, excluding financial sector interventions, totalled 65.7% of gross domestic product, a record for the month of July, but down from the all-time record of 66.2% hit in June.

The Government had originally planned to eliminate the structural budget deficit by 2015, but the weak economy has forced it to extend this by another two years.

Chancellor George Osborne has come under repeated pressure calling for the Government to focus on growth instead of cuts, to try to pull the economy out of recession.

The Treasury said in a statement: “The Government remains committed to the credible plan we have set out to deal with Britain’s debts, and today’s numbers emphasise how risky it would be to deliberately increase borrowing.”

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