• Text size      
  • Send this article to a friend
  • Print this article

Public-sector borrowing increases to £13bn

BRITAIN'S beleaguered public sector finances showed little sign of improvement in May as economists said the coalition appeared to be struggling to meet its target for bringing down the deficit.

Borrowing rose to a higher-than-expected £13.3bn though it edged down by £200m, or 1.5 per cent, on an underlying basis.

Experts pointed out this was much narrower than the 11 per cent fall in the deficit for the current financial year, pencilled in by the independent Office for Budget Responsibility (OBR).

Samuel Tombs, of consultancy Capital Economics, said the figures "contain tentative signs the coalition may be beginning to struggle to bring down the deficit in line with the fiscal plans."

Tax receipts had "continued to grow disappointingly weakly", he added. "So, while the economic recovery may now be fairly strong, it still appears to be struggling to have much of an impact on the borrowing numbers."

Treasury coffers were partly boosted by surging stamp duty revenues, which were 28 per cent ahead at £1.2bn. This was primarily driven by higher receipts from land and property transactions rather than share deals to which it also applies.

The £13.3bn borrowing figure for May was £4.6bn up on the same month last year.

A Treasury spokesman said: "Today's figures continue to be in line with the budget forecast."

Contextual targeting label: 

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis.
If you're a relatively new user then your comments will be reviewed before publication and if we know you well and trust you then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.