Recent data in shows that the State borrowed more in June this year than it did in 2011. The public sector borrowed £14.4bn which is £500m more than in 2011 and £1bn more than the market expected.
Statistics, produced by ONS (Office for National Statistics) showed that borrowing for the financial year to date is £6.8bn higher than for the same period twelve months earlier - which puts under threat the borrowing targets for the year.
These figures are the result of the economy falling back into recession which has a significant bearing on tax revenues and social spending.
June’s figures show a 0.1% drop in income tax raised to £10.8bn while spending on social benefits, including unemployment rose by 2.3% to £15.4bn.
Recently the IMF (International Monetary Fund) has slashed http://www.griffinandking.co.uk/ forecast GDP Growth for the UK to just 0.2% for 2012.
These figures highlight the importance of the UK returning to growth. The IMF has warned that austerity should be eased in 2013 if the economic recovery fails to materialise.
written by Tim Corfield.