LONDON (Reuters) – British government borrowing rose more than 10 percent in the first half of the financial year, giving Chancellor George Osborne little scope to offer sweeteners to voters before a parliamentary election in May.
Osborne said in March he would aim to reduce the budget deficit by more than 10 percent over the following 12 months, helped by Britain’s fast-recovering economy. But Tuesday’s official data make that target look out of reach.
The opposition Labour party lost no time in using the figures to attack Osborne who originally planned, after taking office in 2010, to largely get rid of the deficit by 2015.
“These figures are a serious blow to George Osborne,” Labour’s finance spokesman Chris Leslie said in a statement.
“Not only is he set to break his promise to balance the books by next year, but borrowing in the first half of this year is now 10 per cent higher than the same period last year.”
Britain’s economy has staged a stronger-than-expected recovery since the middle of 2013. But that has not yet translated into a big increase in tax revenues, in large part because slow wage growth has kept a lid on income tax receipts.
Economists said Osborne would be unable to offer much to voters when he presents a half-yearly budget update on Dec. 3.
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