British official public deficit higher than expected in June

20th July 2010, Comments 0 comments

British public sector borrowing was higher than expected in June, official data showed on Tuesday, in a blow to government hopes of slashing the huge public deficit.

The public deficit, known here as the public sector sector net borrowing requirement, the government's preferred measure of public finances, stood at 14.5 billion pounds (17 billion euros, 22 billion dollars), the Office for National Statistics (ONS) said in a statement.

The reading was higher than market expectations for a deficit of 13.5 billion pounds, but was a slight improvement from 14.7 billion in June 2009.

"The public finances were worse than expected, providing a blunt reminder to Chancellor George Osborne of the major task that he faces in returning the public finances to health," said IHS Global Insight economist Howard Archer.

"Indeed, the PSNBR was an eye-wateringly high 14.5 billion pounds in June, although at least this was marginally down on the shortfall a year earlier."

The ONS added that the public sector net cash requirement (PSNCR) -- an alternative measure of public finances -- expanded last month to show a deficit of 20.9 billion pounds, compared with 20.2 billion pounds in June 2009.

"June's UK public finances figures put a bit of a dent in hopes that the fiscal position is now on a clearly improving trend," added Capital Economics analyst Jonathan Loynes.

Finance minister George Osborne, whose official title is Chancellor of the Exchequer, last month unveiled higher taxation and spending cuts in an emergency budget aimed at narrowing the nation's enormous public deficit.

The Conservative-Liberal Democrat coalition which took power after a general election in May inherited a record 154.7-billion-pound (233-billion-dollar, 187-billion-euro) deficit from the previous Labour government.

The goal is to reduce the shortfall to 37 billion pounds in 2014-2015 and to 20 billion pounds in 2015-2016.

© 2010 AFP

0 Comments To This Article