Chemistry Board

The UK government borrowed more than expected in July, traditionally a good month for tax receipts. Net borrowing was £600m in July, an increase of £3.4bn on the same month in 2011 when it repaid £2.8bn.

The Treasury blamed disappointing corporation tax receipts, especially from North Sea oil production. Labour said raising taxes and cutting spending "too far and too fast" had "choked off the recovery".

Analysts suggest the government could end up borrowing about £30bn more than last year, when official forecasts had suggested borrowing would fall this year.

Four months into the financial year the government has borrowed £44.9bn, up from £35.6bn from the same period in 2011. That excludes banking interventions and the one-off boost in April from a transfer of Royal Mail pension assets to the public sector.

The Office for Budget Responsibility, the official UK economic forecaster, predicted that borrowing on the same measure would be £120m for the whole of the financial year, down from the £125m borrowed last year.

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