The UK’s public sector recorded an unexpected deficit in July.
Public sector net borrowing totaled £62 million, according to the Office of National Statistics (ONS).
Even though the deficit was relatively low, it has been normal for July to be a surplus month, as quarterly corporation tax bills and self employed income tax receipts hit the public purse strings.
Markets had expected to see a surplus of £2.5 billion. It is possible though that future revision to data may alter the original findings. Last July was originally declared as a deficit, only for it to be later revised to a £823 million surplus.
Analysts have played down the significance of the deficit. Commerzbank economist Paul Dixon said the figure was “obviously slightly worse than expected. But I think all in all, it’s only a very small deficit.”
The total tax take in July was 3.4 percent higher than the previous July, with significant rises in VAT, national insurance and income tax.
A Treasury spokesman said: “”Strong tax receipts in July confirm that the economy is moving from rescue to recovery,”
“There is still a long way to go as the UK recovers from the biggest economic crisis in living memory, and the government is sticking to the economic plan that has already cut the deficit by a third.”