Public borrowing rises to £11.6bn


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George Osborne’s public finances headache worsened yesterday as official figures showed that the deficit in August came in at £11.6bn, £700m more than the same month last year and higher than City expectations.

The Office for National Statistics said public borrowing for the tax year to date is £45.4bn, 6 per cent more than the same stage of 2013/14.

Weak income tax receipts  are primarily responsible for the overshoot. The annual comparison has been distorted by strong receipts in early 2013/14. But income tax and national insurance receipts were still weak in August, rising by just 1.6 per cent year-on-year despite record employment numbers.

Analysts predicted that the Coalition could find it difficult to meet its £115bn borrowing target. “Public finance figures show that the Coalition is still struggling to bring borrowing down as quickly as planned in the Budget,” said Samuel Tombs of Capital Economics.