Britain’s public sector net borrowing rises despite austerity measures.
Britain’s public sector net borrowing has increased to £17.9 billion in May from £15.2 billion a year ago while the British government’s austerity measures were to slash government borrowing.
The increase in Britain’s public sector net borrowing, excluding financial interventions such as bank bailouts, has raised questions over whether the British government can achieve its full-year target.
British Chancellor George Osborne is aiming to trim total borrowing in 2012-2013 to £120 billion. However, the weak figures released by the country’s Office for National Statistics (ONS) have cast a cloud over such plans.
Moreover, the ONS said total government spending was 7.9 percent higher in May and total tax receipts rose by 1.6 percent.
The statistics agency also said that the key factors contributing to the increase in public sector borrowing were a 7 percent drop in income tax receipts and a 12 percent rise in welfare benefits from a year earlier.
“May's public finances are expected to have been pressurised by the hit to tax revenues coming from weakened economic activity”, said Howard Archer, chief UK and European economist at IHS Global Insight.
This comes as recent reports showed the British people are to face austerity measures for a decade until 2020. The measures include billions of pounds of spending cuts and hundreds of thousands of public sector job losses.