Borrowing up: It looks increasingly unlikely that Chancellor George Osborne can hit his challenging target of reducing borrowing substantially over this financial year
Treasury receipts from income and corporation tax, as well as VAT were all higher than a year ago, despite worries that the economy has slowed down in the run-up to the referendum. But the Government’s total current expenditure was also higher than a year ago.
Scott Bowman of Capital Economics said: “We should take the figures for the first few months of the fiscal year with a pinch of salt as they are often revised because they are largely based on forecast data.
“And if the UK votes to remain in the EU then growth should rebound in the second half of this year, paving the way for a more rapid improvement in the public finances. Nonetheless, the big picture is that the Chancellor has a long way to go in order to meet his fiscal forecasts.”
The total amount the Government owes (public sector net debt) has risen by £49.6 billion in the past 12 months to just more than £1.6 trillion or 84% of the country’s total economic output.
