POLITICS

George Osborne's Deficit Cutting Stalls As UK Borrowing Soars (GRAPH)

20/06/2014 15:24 BST | Updated 20/06/2014 15:59 BST
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LONDON, ENGLAND - JUNE 09: Britain's Chancellor of the Exchequer George Osborne leaves 10 Downing Street on June 9, 2014 in London, England. The Education Secretary Michael Gove and and Home Secretary Theresa May were both called to attend a meeting at 10 Downing Street in London today with British Prime Minister David Cameron. The meeting was to discuss the alleged 'extremist takeovers' of schools in Birmingham, and was held on the same day that Ofsted released a report in to Schools at the centre of a 'Trojan Horse' plot. (Photo by Dan Kitwood/Getty Images)

George Osborne's plan to eliminate Britain's deficit by 2018 has been undermined as the decline in the rate of borrowing looks to have ground to a halt.

The Office for National Statistics revealed in new figures out today that the rate of public sector net borrowing had soared to £13.4 billion in May, up from £8.7 billion for the previous May. This means that the deficit to date for 2014/2015 now stands at £24.2 billion, 8.7% greater than at the same time last year.

Jonathan Portes, head of the National Institute of Economic and Social Research, posted this graph charting how the UK's declining rate of borrowing has stalled, in politically uncomfortable news for the chancellor's deficit reduction ambitions.

borrowing

Others agreed cautiously, like Giles Wilkes, former adviser to business secretary Vince Cable, who warned: "If so, [that is] awful. Good news for no one."

Samuel Tombs, senior UK economist at Capital Economics, said: "May's public borrowing figures contain tentative signs that the coalition may be beginning to struggle to bring down the deficit in line with the fiscal plans.

"While the economic recovery may now be fairly strong, it still appears to be struggling to have much of an impact on the borrowing numbers."