Public finances under pressure
· Public sector borrowing, excluding transfers from the Bank of England QE scheme, was £12.7bn in May 2013, compared with net borrowing of £15.6bn in May 2012
· Public sector net debt was 75.2% of GDP
Commenting on the Public Sector Finances for May 2013, published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC) said:
“Various adjustments make it very difficult to make a full comparison of the public finances, although there appears to be a superficial improvement. However the significant fall in our oil and gas reserves, and the problems facing our financial sector, have created a long-term shortfall in the government’s ability to generate tax receipts. Our structural deficit will remain unacceptably high for some time, and the government must persevere with its plan to bring it down. As the economy gradually begins to recover throughout 2013, we expect that public finances will improve.
“Next week’s Spending Review gives the Chancellor an opportunity to reallocate resources, focusing on measures to boost growth such as infrastructure investment, while continuing to make real cuts in current spending. Any room for manoeuvre must be used to help create jobs and drive economic growth.”