UK Public Finances Suffer Worst April On Record

Public borrowing excluding the bank bail-outs  the key measure of the budget deficit widened to £9.95bn in April from £7.25bn for the same month last year. The sharp rise was down to a fall in tax receipts and a rise in expenditure despite the spending cuts. However, the Office for National Statistics said the £300m fall in tax receipts was due to last year’s gain from the one-off bonus tax, which raised £3.5bn. The Treasury reiterated the point.
One-off factors affected borrowing this month, but it is clear from the downward revision to last year’s borrowing figures that the Government’s deficit reduction strategy is making headway in dealing with our unsustainable deficit, a Treasury spokesman said. Economists were more sceptical, raising questions about whether the Government is already off-track to meet its target of a £122bn deficit for the year to the end of March 2012. Hetal Mehta, at Daiwa Capital markets, said: he public finances have got off to a pretty bad start this year. Once again, it seems that the government is struggling to rein in its expenditure.