As summer threatens to give way to autumn, the drum beat of tax rises is growing ever louder. Today, it was data from the Office for National Statistics showing thatpublic sector net borrowing has surged to a worse-than-forecast £3.1billion in July, significantly higher than the year before.
Meanwhile, public sector net debt excluding state-owned banks has hit an eye-watering 99.4 per cent of GDP. The reason for this latest fiscal setback is not revenue — income tax receipts have grown strongly and debt interest fallen. Rather, it was a rise in government spending and in particular on public services. Something unlikely to be ameliorated by the highly generous public sector pay deals of recent weeks.
