Stabilising Britain's Public Finances Remains A Long And Difficult Task
21 August 2013 in Chamber News
• In July 2013 public sector net borrowing, excluding the effects of transfers from the QE scheme, was £0.5bn, £1.3bn higher than in July 2012 when it was -£0.8bn (a surplus)
• Public sector net debt in July 2013 was 74.5% of GDP
Commenting on the Public Sector Finances for July 2013, published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC) said:“Various adjustments introduced this year, such as the exclusion of transfers from the Bank’s QE scheme, make it difficult to compare underlying trends in our public finances. However, the figures point to a slight deterioration, which is worse than expected. July is one of the main months of the year for generating tax receipts and is often in surplus, but this time we are seeing a small deficit. This shortfall could be a result of significant falls in our oil and gas reserves and the weakening of our financial sector. Despite this, we are still early in the financial year and if the economy continues to improve we could see a more meaningful reduction in the deficit in the months ahead.
“But challenges still remain and the government must continue with its plan to stabilise our public finances. While continuing with cuts in current public spending, the government must shift priorities towards measures to boost growth, such as investment in infrastructure projects that will help the economy continue to recover in the medium-term.”