Public Finance disappoint at fiscal year begins: UK

LONDON: Britain's public finances made a disappointing start to the fiscal year as weaker tax receipts and higher spending led to the worst borrowing tally for a month of April on record.

Tuesday's figures highlight the challenge facing the government as it tries to cut Britain's bloated budget deficit through an ambitious austerity agenda.

British public sector net borrowing came in at 7.7 billion pounds last month, around 2.5 billion pounds higher than a year ago and the worst reading recorded for a month of April, according to the Office for National Statistics.

The government's preferred measure of borrowing, which excludes financial sector interventions, also notched a record high at just under 10 billion pounds.

The only bright spot was a revision to figures for the last fiscal year which showed the government borrowed around 2 billion pounds less than previously thought.

"It's not a good start to the financial year," said Philip Shaw, an economist "The total borrowing figure was significantly higher than we expected."

The statistics office noted that spending figures for the first month in the fiscal year were "highly provisional" and could be revised.

It also said last year's figures were flattered by a one-off bank payroll tax which raised 3.5 billion pounds, and by higher bonuses and share options which were not repeated this year.

Other categories which showed deterioration included interest payments on gilts, which were a billion pounds higher last month than in April 2010.

This largely reflects higher retail price inflation, which determines payments on index-linked gilts.

The government said its deficit-fighting agenda remained on track and noted that Tuesday's figures were skewed by one-off factors.

COPYRIGHT REUTERS, 2011