Did you know the country’s debt just hit a new high of £1.3 trillion?

National borrowing is actually going up, with the UK in more debt than ever before and borrowing more than last year.

You kept that one quiet, George Osborne.

Our nation’s debt is expected to rise as we continue to borrow, while the chancellor deals with the deficit (the difference between what we have coming in and going out). He has promised to eradicate it by 2019 if the Conservatives are still in power and, up until this year, it had been gradually shrinking.

However, figures for June from the Office for National Statistics show the deficit was higher than expected last month, continuing the poor performance of the first half of this year. It reached £11.37bn in June, up from £7.59bn in June 2013, and higher than the £10.65bn analysts had predicted.

So what’s gone wrong?

The ONS said the first three months of the tax year, which started in April, were not representative of what our finances might be like during the year.

One-off factors, such as changes in tax rules the year before, may have skewed the figures slightly and we won’t know for sure until July whether the public purse is really suffering.

Reports and surveys of businesses have indicated the economy is improving and, as businesses do better, the amount of money coming back to the Treasury in the form of tax will probably increase.

But there are also some signs that the improvement in the economy could be slowing, which means Osborne may have his work cut out if he’s to continue to convince the public his economic plan is working.

Readers' comments (1)

  • Yet again the complexity of Britain's tax law prevents the government from predicting what its tax revenues will be. Tax simplification must move from tinkering with grammar to full blown simplification. We all need to have this clarity and fast.

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