The amount of UK public sector borrowing has fallen in May, according to figures published by the Office of National Statistics, counteracting a surprise 5% increase in borrowing in April from the year previous.
The amount of money borrowed by the UK government to fund public spending in May has fallen by 6% on the same period last year, according to figures published today by the Office of National Statistics.
Borrowing was down to £17.4bn in May, as growing VAT revenues and an increase in general taxation take helped offset the costs of funding the public sector. While overall tax revenue increased by 8.2% over the period, spending grew by just 2.2% in the same timeframe, helping narrow the gap between revenue and spending from previous months.
The figures are welcome news for the government, who are targeted to cut borrowing by 15% over the course of the year. However, the picture for 2011 so far reflects a modest increase in borrowing from last year, in spite of May’s figures, as a result of the jump in April’s borrowing account, and rising borrowing costs are continuing to fuel public spending in the round.
VAT receipts jumped by some 17% in May, helping to offset these rising borrowing costs which were up just under 9% on the month from April. According to some analysts, the figures represent within-expectation results, and whilst they do counteract the rise in borrowing reported in April, the picture still remains challenging for the government.
The UK government is committed to eliminating the structural deficit by the end of the current parliament in 2015.