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Public sector borrowing fell last month

In the lull before the storm of the next Budget, official figures show that public sector net borrowing fell in May. In fact net borrowing reached £16bn, which was down by 8% on the £17.4bn recorded in May last year.

Public sector net debt, shown as a percentage of Gross Domestic Product was 62.2% at the end of May 2010, compared with 55.4% at the end of May 2009. Net debt was £903.0bn at the end of May compared with £774bn at the same time last year.

The figures show that there was an increase in both income tax and VAT receipts, with income from VAT having risen 11.9% on the same month last year and income tax, capital gains tax and national insurance taken together were up 7.3%. There was also a rise of 15.7% in corporation tax.

Although this may help the chancellor, George Osborne grab another minute’s sleep at night, it is not going to stop him making significant cuts in government spending, to follow the ones he made last week. Death by a thousand cuts?

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Posted in government borrowing, government spending, Public Finances

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