Public borrowing climbed to £11.4bn in June

22 Jul 14
Public sector borrowing in June was £11.4bn, almost £1bn more than expected, figures from the Office for National Statistics have revealed.

Office for Budget Responsibility forecasters had expected public sector net borrowing to narrow to £10.5bn.

Borrowing in June was also £3.8bn higher than in June last year, the ONS Public sector finance June 2014 report said. For the financial year to date, public sector net borrowing stands at £36.1bn, compared to £33.7bn a year earlier.

Central government receipts were also down to £44.1bn, £1.9bn lower than in the same month last year.

Commenting on the figures, Rowena Crawford, senior research economist at the Institute for Fiscal Studies, said the figures showed borrowing so far this year had not fallen relative to last year, confounding the Office for Budget Responsibility’s forecast that this would be the case over the year as a whole.

But she added: ‘This is largely the result of a fall in income tax receipts over the last three months compared to the same months last year, which is not expected to continue. Income tax receipts in the early months of the last financial year were particularly high, as some high-income individuals pushed their income from 2012/13 into 2013/14 to take advantage of the lower top rate of income tax that was effective from April 2013.

‘This boosted pay-as-you-earn income tax receipts in the early months of 2013/14. This boost to receipts was not repeated in the early months of this year, but there should be a significant boost to income tax receipts from self-assessment in the last three months of the current financial year in response to the same types of income shifting.

‘This could be sufficient to bring borrowing back on track to meet the OBR’s forecast.’

Labour’s shadow chief secretary to the Treasury Chris Leslie said Chancellor George Osborne was set to break his promise to balance the books by next year.

‘Borrowing is now expected to be almost £190bn more than planned under this government. This is the cost of three damaging years of flat lining and falling living standards we have seen since the election,’ he said.



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