By Marcus Leach
Official figures have revealed that UK government borrowing rose by half a billion pounds in June 2012, compared with a year earlier.
The data released by the Office for National Statistics (ONS) shows that public sector net borrowing, excluding interventions such as bank bailouts, was £14.4bn last month, up from £13.9bn in June 2011.
Borrowing in 2011-12 was also revised for the second time, but still came in under the government's forecast.
“The deficit in June was higher than a year ago, and confirms the challenges facing the UK in restoring its public finances," David Kern, Chief Economist at the British Chambers of Commerce (BCC), said.
"Deficit reduction will be a difficult task, and will put further pressure on both businesses and consumers over the coming months. Judging by these figures, we expect total borrowing in 2012/13 to reach £98bn — £6bn more than the OBR predicted in March.
“Although there are many calls for the government to ease the pace of the fiscal squeeze, doing so now would be a mistake. The right approach is to persevere, but combine focused deficit reduction with more forceful policies to support growth.
"The Chancellor has earned considerable credibility in the financial markets, and now it’s time for him to make use of that credibility to help the private sector flourish. Cutting regulation, implementing the recent announcements on infrastructure and export support, and creating a business bank would help businesses drive growth.”
Provisional estimates for current month:
• Public sector net borrowing was £14.4 billion in June 2012; this is £0.5 billion higher net borrowing than in June 2011, when net borrowing was £13.9 billion.
• Public sector current budget deficit was £13.0 billion in June 2012; this is a £0.6 billion higher deficit than in June 2011, when there was a deficit of £12.4 billion.
• Public sector net borrowing was £125.7 billion for 2011/12; this is £0.3 billion lower than the Office for Budget Responsibility (OBR) forecasted net borrowing for 2011/12 of £126.0 billion.
• Public sector net debt was £1,038.3 billion at the end of June 2012, equivalent to 66.1 per cent of gross domestic product (GDP).
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