June public borrowing higher than forecast

City A.M. Reporter
The UK Government borrowed more than expected in June as a weak economy continued to weigh on public finances, official data showed on Friday.

The Office for National Statistics said that public sector net borrowing excluding financial sector interventions -- the government's preferred measure -- rose last month to £14.5bn from £13.9bn in June 2011.

This was above economists' average forecast in a Reuters poll for £13.4bn. This took borrowing in the fiscal year to date to £14.9bn, less than half the £38.4bn in 2011/12, but figures this fiscal year are being flattered by the transfer of the Royal Mail pension assets to the government.

Stripping out this effect, the ONS said that public sector net borrowing for the fiscal year to date had risen by 11.7 per cent, compared to a decline of 4.6 per cent forecast by the Office for Budget Responsibility for the fiscal year as a whole.

However, seasonal effects, such as income tax receipts due towards the end of the year, may put public finances more in line with the OBR's forecasts.