GEORGE Osborne has suffered a blow with official figures showing a rise in UK Government borrowing that will make it harder for the Chancellor to produce any pre-election giveaways and raises the prospect of more spending cuts to meet the deficit-reduction target.
Data from the Office for National Statistics showed revenues from income and wealth taxes failed to grow compared to the same month last year.
Borrowing for September, excluding the effects of bank bail-outs, was £11.8 billion, up £1.6bn compared to the same month last year. For the period April to September it stands at £58bn, 10 per cent higher than for the same period in 2013/14.
Halfway through the financial year, the Treasury looks well behind the target for a 12 per cent fall in the annual deficit expected by the independent Office for Budget Responsibility (OBR).
Underlying public sector debt was £1.451 trillion or 79.9 per cent of gross domestic product compared to 79.2 per cent last month and 77.9 per cent in September last year.
Samuel Tombs of Capital Economics said: "The continued run of poor UK public borrowing figures looks to severely hamper the Chancellor's ability to announce giveaways to address his party's deficit in the polls before next year's General Election."
Sumita Shah from accountancy body ICAEW said: "We are paying a colossal amount of interest per year, a sum larger than it costs to run a number of government departments.
"UK debt is now 79.9 per cent of GDP and is getting close to being unsustainable at a time when we already expect economic growth to slow down in 2015."
Last night, Chris Leslie, the Shadow Chief Secretary to the Treasury, said: "These figures are a serious blow to George Osborne. Not only is he set to break his promise to balance the books by next year, but borrowing in the first half of this year is now 10 per cent higher than the same period last year.
"As the OBR said last week, stagnating wages and too many people in low-paid jobs are leading to more borrowing," he added.
A Downing Street spokeswoman said: "Everyone around the Cabinet table is clear the figures show the impact of the great recession is still being felt, but the Government's long-term economic plan is working.
"What matters is that we keep taking the measures and delivering the plan that will help to build a resilient British economy."
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