Belfast Telegraph

UK sinks further into red as net borrowing reaches £3.8bn

By Russell Lynch

The UK sank further into the red in July with net borrowing of £3.8bn over the month, official figures showed today.

The sum — in line with City forecasts — brings public borrowing for the four months of the financial year so far to £44.9bn, the Office for National Statistics (ONS) said. This month's figures showed an improvement on 12 months earlier when the UK borrowed £6.1bn, the ONS added.

July's figures are usually boosted by corporation tax and VAT receipts although the recession forced the UK to borrow during the month for the first time in 13 years in 2009.

The independent Office for Budget Responsibility is expecting borrowing of £149bn for the financial year as a whole — down from £155bn in 2009-10.

Today's figures showed some signs of recovery however with tax receipts of £49.7bn — up £4.8bn on a year earlier and the best July since 2008.

The tax take was up 10.5% on a year earlier.

The ONS figures exclude the impact of financial interventions by the Government, which reduce overall borrowing due to profit contributions from the part-|nationalised banks.

The data comes as Chancellor George Osborne warned this week of the danger of not sorting out the public finances amid discontent over the savage cuts planned in June's emergency Budget.

Belfast Telegraph