Porgie Osborne has got some explaining to do this morning, after the Office for National Statistics (ONS) released figures showing the public sector borrowing in June 2012 was £500m more than the previous June. We’re now up to a staggering £14.4bn borrowed for the month, and that’s on top of all the money that HMRC already takes in tax revenue.
Not least of Porgie’s worries will be that his constant rhetoric about the ‘hard-won fiscal credibility’ of the UK has now been undermined two months in a row, with spending higher than the 2011 figure on both occasions. The actual deficit (a word we hear every day from Porgie and Chums) was £13bn in June this year, which is a mighty £600m more than June 2011. None of these figures looks good to us, given that public sector job cuts aimed at reducing the deficit appear to be having no effect.The total public sector debt for the UK now stands at £1,038bn, which is around 66% of GDP.
The political consequences of these figures will be tricky to navigate for the government. David Cameron only yesterday took to the Daily Telegraph to say he could see no end in sight for austerity measures, and that ‘tough spending decisions’ could carry on past 2015. Having told the public for two years that austerity is a necessity for reducing the deficit, Cameron will be wracking his brains for some kind of spin to explain away the disappointing results. Although the numbers do also suit his overall size-of-state-reduction agenda.
With economic woes still bubbling away across the Channel however, the UK economy is inevitably going to suffer, there’s nothing much we can do about that. But one thing’s for sure: the IMF ain’t gonna like our debt getting any bigger…