UK government budget under extreme pressure
The revelation that the UK government was forced to borrow £8 billion last month is fuel to the fire for those who believe the UK economy is still some way from recovery. This is the first time that the UK government has borrowed any money in July since 1996, as the month of July is historically one of the stronger times of the year regarding tax receipts. So what is going on?
When you consider that the UK government made a payment of £5 billion last July there are concerns that the budget is out of control and public sector borrowing is set to rise significantly. Overall debt is quoted at £800 billion, although many believe the real figure is substantially higher, which equates to nearly 57% of GDP. Again, this figure is worrying as it is the highest since records began back in 1974.
A number of analysts had expected the government to borrow funds in July but the majority forecast the figure to be around £500 million, not the £8 billion which was confirmed. Total UK government borrowing is expected to top £175 billion for the current year and could have a detrimental impact on the eventual recovery in the UK economy.
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