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| Version 1 | Version 2 |
|---|---|
| Public borrowing at £11.4bn in June | Public borrowing at £11.4bn in June |
| (35 minutes later) | |
| The government borrowed more than expected in June, and has failed to reduce public sector borrowing since the start of the fiscal year, official figures have shown. | The government borrowed more than expected in June, and has failed to reduce public sector borrowing since the start of the fiscal year, official figures have shown. |
| Public sector net borrowing stood at £11.4bn last month, the Office for National Statistics (ONS). | Public sector net borrowing stood at £11.4bn last month, the Office for National Statistics (ONS). |
| The figure was above economists' forecasts of £10.65bn. | The figure was above economists' forecasts of £10.65bn. |
| For the financial year to date, the public deficit stands at £36.1bn, up 7.3% from a year earlier. | For the financial year to date, the public deficit stands at £36.1bn, up 7.3% from a year earlier. |
| If the current deficit trend continues, this will put public sector borrowing at about £113bn in this year, missing the government target of £95.5bn, said Howard Archer, chief UK economist for IHS Global Insight. | If the current deficit trend continues, this will put public sector borrowing at about £113bn in this year, missing the government target of £95.5bn, said Howard Archer, chief UK economist for IHS Global Insight. |
| "The overall performance for April-June has clearly not been the start to fiscal year 2014/15 that George Osborne would have been looking for," Mr Archer said. | "The overall performance for April-June has clearly not been the start to fiscal year 2014/15 that George Osborne would have been looking for," Mr Archer said. |
| "One-quarter of the way into the tax year it looks like the Chancellor faces a battle to achieve his fiscal targets for 2014/15 and he will certainly need growth to hold up." | "One-quarter of the way into the tax year it looks like the Chancellor faces a battle to achieve his fiscal targets for 2014/15 and he will certainly need growth to hold up." |
| Mr Archer added that Mr Osborne will be "fervently hoping" that the public finances improve in the run up to the next general election in May 2015. | Mr Archer added that Mr Osborne will be "fervently hoping" that the public finances improve in the run up to the next general election in May 2015. |
| Tax distortions | Tax distortions |
| The first three months of 2013 saw higher than usual income tax payments, due to a substantial amount of bonus payments being delayed from March 2013, Mr Archer said. | The first three months of 2013 saw higher than usual income tax payments, due to a substantial amount of bonus payments being delayed from March 2013, Mr Archer said. |
| People wanted to capitalise on the top tax rate of tax being cut from 50% to 45% in April 2013. | People wanted to capitalise on the top tax rate of tax being cut from 50% to 45% in April 2013. |
| Income tax in the first three months of this tax year was 3.4% lower than in the first three months of the 2013/14 tax year, he added. | Income tax in the first three months of this tax year was 3.4% lower than in the first three months of the 2013/14 tax year, he added. |
| David Kern, chief economist at the British Chambers of Commerce said: "Since the financial crisis, weaknesses in the financial sector and structural changes in the rest of the economy have created a major shortfall in the UK's ability to generate tax revenues, even as economic growth returns to normal." | David Kern, chief economist at the British Chambers of Commerce said: "Since the financial crisis, weaknesses in the financial sector and structural changes in the rest of the economy have created a major shortfall in the UK's ability to generate tax revenues, even as economic growth returns to normal." |
| Receipts for VAT in June were described as a "let-down" by John Bulford, economic advisor to the EY Item Club. | |
| "VAT receipts were up just 4.3% to the same three months a year ago, the worst performance for almost a year," he said. |