Almost £16bn was added to the national debt in August, excluding financial interventions, reversing July’s surprise surplus.
August’s deficit of £15.9bn is up from £14bn in August last year, with spending up by £3.5bn compared with the same month last year. The largest component of that is a £1bn increase in benefit payments.
Revenues did increase with a £4bn fall in the tax gap – the difference between expected and received revenues, as a result of evasion and inaccurate form filling. The gap still stands at around £35bn a year, however.
The national debt now stands at £944.5bn, or 61.4 per cent of GDP. That means the government has borrowed an extra £134bn in the last 12 months.
When the bank bailouts are included, the national debt stands at £2,258.8bn, or 146.9 per cent of GDP.
The Treasury’s compilation of independent economic forecasts, out yesterday, suggested growth is slowing. That will hit tax revenues as fewer jobs are created.
Average predictions for 2011’s total GDP growth have slowed from 1.3 per cent in August to 1.1 per cent over the last month.