[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Thursday, 20 July 2006, 10:14 GMT 11:14 UK
Worst June ever for UK finances
Chancellor Gordon Brown
Mr Brown may break his promise of meeting borrowing targets
UK public finances suffered their worst June on record, figures from the Office for National Statistics (ONS) show.

Government borrowing rose to 7.3bn in June from 6.2bn during the same month last year - significantly higher than analysts' forecasts of 6.5bn.

Meanwhile, the current budget deficit stood at 6.4bn, 1.7bn higher than at the same time last year.

Experts said high spending was to blame, as grants to local authorities had been paid earlier than usual.

Elsewhere, economic activity appeared to be fairly healthy, with consumer spending picking up and tax receipts rising 5.4% year-on-year.

Targets vow

In his recent Budget, Chancellor Gordon Brown insisted he would meet his target of cutting the current budget deficit to 7bn and public sector net borrowing to 36bn.

That promise may now prove difficult to keep, as current borrowing for the year now stands at 16.4bn.

However, a Treasury spokesman insisted it was meeting its strict fiscal rules and would "continue to do so".

Global Insight chief economist Howard Archer warned that in order to meet his targets, Mr Brown would need "the help of healthy growth over the coming months, as well as increased restraint in government spending".

Douglas McWilliams, chief executive of the Centre for Economics and Business Research added that as well as tighter control of public spending, the Chancellor might also look to raise tax revenues.

The BBC is not responsible for the content of external internet sites

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Americas Africa Europe Middle East South Asia Asia Pacific