UK borrowing on the rise despite Government trying to talk up signs of recovery

Government borrowing hit £12.4billion in June, up £500million on last year, in a blow to the Chancellor's reputation

Failure: Chancellor George Osborne is borrowing more

Chancellor George Osborne's attempt to cut Britain's debts are failing, official figures showed today.

Government borrowing hit £12.4billion in June, up £500million on the same month last year once distortions like the bank bailouts were stripped out.

The deficit for May was revised up by £2.2billion because statistics watchdogs said Mr Osborne could no longer count cash he was banking on from a tax avoidance deal with Switzerland.

And borrowing over the first three months of the year stood at £35.9billion, the same as in the first quarter in 2012, the Office for National Statistics said.

The figures come after a warning about the UK's finances from the Government's own Office for Budget Responsibility earlier this week.

Mr Osborne and fellow ministers have been desperately trying to talk up signs of recovery in the economy.

But independent expert Martin Beck, of City firm Capital Economics, said the new figure show that the public finances remain a "long way from health".

"While other indicators are pointing to signs of life in the UK economy, the public finances have yet to see much of a boost from the nascent upturn," he said.

Shadow Treasury minister Chris Leslie said Britain was paying the price of Mr Osborne's failure to boost living standards and economic growth.

The Labour MP said: "These disappointing figures show that our stalled economy has led to deficit reduction grinding to a halt.

"Underlying borrowing rose last month and it was exactly the same in the first three months of this year as it was in the same period last year."

Mr Leslie added: "He's borrowing billions more than planned simply to pay for the costs of his economic failure. And his promise to balance the books by 2015 is now in tatters."

The deficit did fall last month by £3.4billion to £8.5billion bit only once a £3.9billion cash transfer from the Bank of England's scheme that injects cash into the economy was taken into account.

Mr Osborne had hoped to claw back £3.2billion from Swiss bank accounts in May but received just £342million.

The Government highlighted revised figures showing that underlying borrowing did fall by £2.1billion in the last financial year after a previous revision showed it going up.

A Treasury spokesman said: "The Government is taking tough decisions to deal with the deficit: today's data shows that borrowing fell last year.

"And while we can and will take nothing for granted, the economy is moving from rescue to recovery: the economy is growing; the deficit and unemployment are falling."

The worrying figures undermine Chancellor George Osborne's over-blown claims that the battered economy is now back on track

See more stories you'll love

You've turned off story recommendations. Turn them on and we'll update the list below with stories we think you'll love ( how we do this).

Recommended in Money Why?

See more stories you'll love

You've turned off story recommendations. Turn them on and we'll update the list below with stories we think you'll love ( how we do this).

Recommended on the Mirror Why?

www.yahootrend.com