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Vicky Redwood, UK economist at Capital Economics, said:
Commenting on the public sector finance figures, David Kern, Chief Economist at the British Chambers of Commerce, said:
July is normally a strong month for tax income for the Treasury, but total receipts fell 0.8%, driven by a drop in corporation tax, while Government spending increased 5.1%.
In a further blow to the Chancellor, net borrowing for April to June was revised up by £1.4 billion.
That means borrowing so far this year, excluding a one-off boost after assets from the Royal Mail's pension fund was transferred to the Treasury, is £44.9 billion, £9.3 billion higher than a year ago.
Chancellor George Osborne's deficit reduction plans were dealt a blow today when official figures revealed a shock rise in borrowing in July.
Public sector net borrowing, excluding financial interventions such as bank bailouts, came in at £600 million in July, compared with a surplus of £2.8 billion in the same month last year, dashing the City's expectations of a surplus of £2.5 billion.
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It's not just the worse than expected public borrowing figures that might ruin George Osborne's parliamentary recess.
Only 16% of the British public appear to trust the Chancellor George Osborne to see the country through the current economic situation.