Commenting on the public sector finances for May 2014, published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC) said:
“It is disappointing that for the second month in a row underlying net borrowing was higher than the previous year. If this continues, the reduction in borrowing that the Office of Budget Responsibility predicted in March will become a real challenge.
“It is clear that Britain’s fiscal position remains difficult despite the stronger than expected economic growth we have seen recently. Since the financial crisis, weaknesses in the financial sector and structural changes have created a major shortfall in the economy’s ability to generate tax revenues, even when economic growth returns to normal.
“The government must adjust to these new realities and continue to reduce the share of current public spending in GDP. This will be difficult and perhaps unpopular, but it is essential if we are to secure a lasting recovery.”