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Unexpected increase in borrowing triggers calls for policy changes

UK borrowing figures for July reached almost £600m, figures from the Office for National Statistics have revealed.

This compares with a surplus of £2.8bn in July 2011.

The Treasury has blamed the figures on disappointingly low corporation tax receipts, which normally provide a boost to the economy at this time of year.

The news has sparked criticism of the Government’s economic plan, with Labour arguing that rather than securing the recovery and reducing the deficit, it had instead ‘delivered the exact opposite – a double-dip recession which is leading to soaring borrowing’.

However, the Treasury has confirmed that the Government remains committed to ‘the credible plan we have set out to deal with Britain’s debts’.

The Office for Budget Responsibility stated that the outlook for borrowing this year remains ‘uncertain’, with some analysts suggesting that borrowing could rise by around £30bn.