By Jonathan Davies

Government borrowing fell by £6.1 billion in the opening three months of the financial year, according to the Office for National Statistics (ONS).

Public sector borrowing was £25.1bn between April and June, or 1.4% of GDP. In June, borrowing fell £800 million to £9.4bn compared with the same period last year.

Despite a fall in the amount the government is borrowing, the UK's debt is still growing, the ONS said. Public sector debt £77.4bn to £1.513 trillion - 81.5% of GDP.

Sumita Shah, ICAEW Public Sector Policy Manager, said: “The budget deficit continues to improve, and is a sign of a healthy economy. Strong tax receipts are vital to sorting our public finances, so it is good news to see revenues rise by 4.4% compared with a year ago. The Chancellor will be pleased to see these improvements so soon after setting himself a less challenging target for wiping out the deficit altogether.

“However the UK’s public sector debt has now risen to 81.5% of GDP, north of £1.5 trillion. We need tax receipts to continue to rise in the coming months and years. The government must transform the treasury into a modern finance ministry, suitable for the 21st century, which can enforce fiscal discipline across Whitehall before further departmental cuts take effect.”