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Public borrowing hits £17.9bn

The Chancellor's plans to tackle to deficit have come under pressure after figures revealed a larger-than-expected surge in government borrowing. Public sector net borrowing was £17.9 billion in May, up from £15.2 billion the previous year.

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Economists: 'Borrowing on course to significantly overshoot expectations'

Vicky Redwood, chief UK economist at Capital Economics, said borrowing is on course to overshoot "significantly" the official full-year forecast of £120 billion.

She said:

The main problem remains a sharp slowdown in tax receipts. And with the economy probably still in recession, receipts are likely to remain weak.

The combination of worsening public finances and renewed recession is likely to intensify calls for the Government to change tack on its austerity programme.

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