• Public sector borrowing in July 2011 was £20m, compared with £3.5bn in July 2010

Commenting on the public sector finance figures for July, published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

“The borrowing figures for July were much better than expected, and a welcome surprise for the Chancellor after last month’s disappointing numbers. Though it is still possible that the government may overshoot the borrowing target for the year, any excess is likely to be small and considerably less than might have been expected. Making allowances for lower growth and for the worsening international background, the government’s deficit-cutting programme is still on course. Stabilising our public finances must remain a major priority and it would be a mistake to move away from the current strategy.

“The UK’s economic growth, although weak, is likely to remain positive. Reducing the deficit will significantly improve the economy’s long-term prospects. However, in order to minimise risks of a setback, the MPC must maintain low interest rates until at least the middle of next year and consider the possibility of increasing the QE programme. On its part, the government must effectively implement policies aimed at supporting economic growth and empowering businesses to create jobs and export.”