18 June 2010
Public sector borrowing fell slightly in May compared with the same period last year, official data show today.
Monthly figures published this morning by the Office for National Statistics show that the UK borrowed £16bn last month, compared with £17.4bn in May 2009.
The borrowing was to cover a current budget deficit of £14.1bn for the month – down from £15.7bn for the same period in 2009/10.
At the end of May, the government’s total debt stood at £903bn – or 62.2% of gross domestic product.
Both tax receipts and public spending were up. In May, production taxes generated £14.7bn – more than 10% up on May 2009 – while taxes on income and wealth brought in another £10.2bn.
The government spent £4.3bn on debt interest, significantly up on May 2009’s figure of £3bn, while the bill for benefits stood at £14.2bn, a £600m increase on last year’s figure.
The new borrowing comes on top of £10bn borrowed in April, which was higher than a year ago. This suggests that levels of borrowing are fluctuating, rather than exhibiting a clear downward trend.
However, so far this financial year, the cumulative budget deficit of £20.9bn is around 10% lower than last year’s, which was £23.1bn in May.
Gemma Tetlow, senior research economist at the Institute for Fiscal Studies, said the figures would make good reading for the chancellor.
‘As George Osborne prepares for his first Budget [to be given on June 22], he may be reassured by today’s figures which show tax receipts growing more strongly so far this year than was forecast by the Office for Budget Responsibility last week,’ she said.’
‘With the OBR last week forecasting that borrowing this year will be £155bn, the challenge for next week’s Budget will be to set out how the new government plans to reduce borrowing over the next few years.’
