The UK’s public finances improved slightly in June, but remained worse than expected given the economic recovery.
Economics reporter Emily Cadman reports that the government borrowed £11.4bn in June to cover the gap between spending in revenues, just £0.1bn less than the year before.
The higher than expected figure – city economists had been expecting borrowing of £10.65bn in June – took borrowing in the three months to June to £36.1bn, £2.5bn or 7.3 per cent higher than the previous year.
The Treasury believes that much of the weakness is down to unusual patterns in income tax receipts last year, as wealthier taxpayers moved their income around to take advantage of the announced cut in the top tax rate to 45 per cent.
A spokesperson for the Treasury stressed that the borrowing figures continued to be in line with forecasts predicting the deficit will be halved by the end of the year, adding “but the job is not yet done, which is why we must continue to work through the plan that is building a resilient economy.”
Samuel Tombs, senior UK economist at Capital Economics, said the numbers underlined that “fiscal consolidation still has a long way to go yet before the public finances are restored to a sustainable footing”.
