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Public borrowing hits high as tax receipts fall

THE state of the UK’s public finances got even worse in January after spending rose more than expected while tax revenues declined, according to official figures.

Figures from thr Office of National Statistics (ONS) said the government borrowed another £4.3bn last month.

Analysts had expected the government to repay about £2.8bn of its debts.

January is traditionally a strong month for tax receipts, but income tax and capital gains tax dropped sharply.

Meanwhile government spending also rose sharply.

The figures mark the first January that the government has borrowed more than it repaid since 1993.

Andrew Goodwin, senior economic adviser to the Ernst & Young Item Club said: “These are pretty ghastly figures and come as somewhat of a surprise," said Andrew Goodwin, senior economic adviser to the Ernst & Young Item Club.

“January usually yields a healthy surplus due to receipts from corporation tax and even in the current climate it is surprising to see the government rack up a deficit."

The government expects public sector borrowing to hit£178bn this year.