UK public sector net debt at 13 bln pounds in June, 56.6 percent of GDP

UK public sector debt swells

LONDON — The British government borrowed a net total of 13 billion pounds ($21.4 billion) in June, raising national debt to 56.6 percent of GDP as tax receipts slumped amid the recession, the Office for National Statistics said Tuesday.

The debt figure was lower than the consensus forecast of 15.5 billion pounds, but as a percentage of annual economic output it has risen sharply — from 54.8 percent in May, 44.4 percent in June 2008 and 36.7 percent in June 2007.

The increase came as the deep recession sent corporation tax receipts down by 14.1 percent and national sales tax receipts down by 15.9 percent, the agency said.

Treasury chief Alistair Darling has projected borrowing to total 175 billion pounds this year.

“June’s UK public finances figures are a touch better than expected, but do absolutely nothing to alter the big picture that they are in a dreadful state,” said Vicky Redwood, U.K. economist at Capital Economics.

She predicted that borrowing would reach 200 billion pounds or more this year.