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UK debt hits record of £799bn | |
(20 minutes later) | |
Total outstanding government debt in the UK has risen to a record £799bn, or 56.6% of UK GDP - the highest since records began in 1974. | |
Figures showed the government borrowed £13bn in June, almost twice as much as a year ago, after the downturn shrank tax receipts. | |
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. |
The chancellor has said new borrowing will reach £175bn 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' | 'Robust plan required' |
Public borrowing for May was revised down to £18.6bn from an initial estimate of £19.9bn. | 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. | 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. | "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." | "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. | Meanwhile, a National Audit Office (NAO) report said that tax receipts fell by 10% in the past year - the biggest fall since 1923. |