George Osborne accused of being too distracted by the EU Referendum after Treasury plunges even DEEPER into the red
Official figures reveal Government borrowed an eye watering £17.9bn in March and April to make ends meet
GEORGE Osborne has been accused of being disastrously distracted by the EU Referendum after the Treasury plunged even DEEPER into the red.
Official figures revealed the Government was forced to borrow an eye watering £17.9billion in March and April to make ends meet - £200million more than the same two months last year.
The increase comes despite the Chancellor’s vow to bring borrowing down and “fix the roof while the sun is shining”.
Part of the ‘miss’ was down to a thumping £800million increase in interest payments on Britain’s sky high debts.
VAT income was far lower than expected, while stamp duty on property purchases fell.
The Chancellor has a goal of reducing borrowing in 2016-2017 to £55.5 billion – from £75 billion in 2015-2016.
Martin Beck, senior economic adviser to the Ernst & Young ITEM Club, said the Chancellor’s deficit reduction programme had “gone into reverse”.
He said: “Although early days, a sizeable improvement will be necessary in the coming months to get that forecast back on track.”
Ross Campbell, Institute of Chartered Accounts public sector director, said: “The impending EU referendum vote has contributed to an uncertainty that has resulted in a sluggish UK economy, therefore it was imperative that the Chancellor put public sector finances at the top of his priority list for May 2016.
“Whatever the result on Friday morning, it is vital that Government devises a comprehensive and rigorous strategy to kick-start a faltering economic recovery.”
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Separately the pro-EU business lobbyists at the CBI said Britain’s manufacturing sector was finally showing signs of stability – in stark contrast to claims the Referendum is already hitting investment.
The CBI said 20% of businesses reported an increase in total orders, against 23% a decrease - giving a rounded balance of minus 2 per cent.
Economists said this was the best “orders balance” for 10 months.
Howard Archer at Global Insight said: “The survey fuels hope that the manufacturing sector will clearly contribute to UK GDP growth in the second quarter.
“We now believe that GDP growth could even improve to 0.5 per cent quarter on quarter in the second quarter.”
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