Double-dip recession increases debt
Chancellor George Osborne’s hopes of slashing government borrowing will be dealt a blow today as the double-dip recession weighs heavily on the public finances.
Public sector net borrowing, excluding financial interventions such as bank bailouts, is expected to be between £16bn and £16.5bn, compared with £15bn in May last year.
While May is only two months into the financial year, the weak figures will trouble the Chancellor who is aiming to trim total borrowing in 2012/2013 to £120bn, excluding a one-off boost from the transfer of the Royal Mail pension fund into Treasury ownership.
The figures have been hit by less tax revenue, which analysts said was a consequence of the recession and sluggish economic recovery.