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Public borrowing hits June record Public borrowing hits June record
(30 minutes later)
UK public sector borrowing in June was almost double the amount it was a year ago, but came in lower than forecast. UK public sector borrowing in June was almost twice as much as a year ago, after the downturn shrank tax receipts.
Borrowing reached £13bn - a record high for the month of June - compared with £7.5bn a year earlier, the Office for National Statistics (ONS) said. Borrowing reached £13bn - a record high for the month of June - compared with £7.5bn in June 2008, the Office for National Statistics (ONS) said.
The total outstanding government debt stands at £798.8bn, a rise of £157bn on year ago, equal to 56.6% of UK GDP. Total outstanding government debt rose to £799bn, or 56.6% of UK GDP - the highest since records began in 1974.
Separately, the government's tax take fell by £32bn in the past year - the biggest fall since the 1920s.Separately, the government's tax take fell by £32bn in the past year - the biggest fall since the 1920s.
In April's budget, Chancellor Alistair Darling forecast that borrowing would reach £175bn in this financial year.In April's budget, Chancellor Alistair Darling forecast that borrowing would reach £175bn in this financial year.
Analysts had forecast borrowing of £15.5bn in June.Analysts had forecast borrowing of £15.5bn in June.
"The figures are modestly better than expected. It doesn't take away from the fact that the state of public finances is dire and that a considerable degree of fiscal tightening will be required," said Philip Shaw, chief economist at Investec."The figures are modestly better than expected. It doesn't take away from the fact that the state of public finances is dire and that a considerable degree of fiscal tightening will be required," said Philip Shaw, chief economist at Investec.
"The figures are volatile on a month-on-month basis. The size of the shortfall and volatility mean there is little to celebrate.""The figures are volatile on a month-on-month basis. The size of the shortfall and volatility mean there is little to celebrate."
'Robust plan required'
Public borrowing for May was revised down to £18.6bn from an initial estimate of £19.9bn.
Business groups warned that, although it appears that public borrowing is in line with the chancellor's forecast, the government must not sit back.
"It would be wrong to tighten policy while the recession continues, but maintaining Britain's international credibility requires a robust plan for restoring our public finances over the medium-term," said David Kern, chief economist at the British Chambers of Commerce.
"This must focus on curtailing public spending across the board, while avoiding damaging measures that would harm wealth-creating businesses."
Meanwhile, a National Audit Office (NAO) report said that tax receipts fell by 10% in the past year - the biggest fall since 1923.