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UK public borrowing balloons to record high

UK public borrowing rose to a massive £19.9 billion in May as expenditure remained fairly high and income tax receipts continued to fall. The combined deficit for April and May came to an enormous £30.5 billion with some experts suggesting this figure will rise further before eventually falling back. The fact that Alistair Darling has already admitted that the UK public borrowing deficit will reach a massive £175 billion this year alone is a sign of the difficulties waiting for the next UK government.

It was also revealed that Britain's net debt has now risen to a monumental £774.8 billion which is £150 billion higher than this time last year and the equivalent of 54.7% of the U.K.'s annual economic output. Even though the figure is fast approaching £1 trillion many experts believe it is only UK government accounting methods which have held back the figure in the short term, although the "truth" is set to come out over the next couple of years.

These phenomenal deficits further clarify the situation for UK taxpayers in the short to medium term with substantial tax increases inevitable. However, it is highly likely that any major changes to the taxation system will be held back until after the next general election when the government of the day will have four years to replenish and rectify the UK economic situation.

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