Responding to the latest borrowing figures, Julian Jessop, Economics Fellow at the Institute of Economic Affairs said:

“The latest news on government borrowing shows that the fiscal foundations are far from fixed.

“The overshoot on the current budget deficit – the targeted measure – was even worse than the headlines. Borrowing to fund day-to-day spending was £10.6 billion more in the first six months of the financial year than the same period last year and £13.0 billion above the OBR’s forecast.

“The detail is not quite as bad. Central government revenues and spending are much closer to forecast, with the overshoot coming instead from borrowing by local authorities and public corporations (both relatively volatile components).

“But there is still little chance of an improvement any time soon. The OBR’s March forecast made some optimistic assumptions for the second half of the year (especially about capital gains tax receipts, debt interest and benefit payments), and private sector activity is stalling again.

“It is clear that simply raising taxes even further is not going to solve the problem. The Government needs to refocus on controlling public spending and freeing up the private sector to drive growth.”