Higher tax receipts and lower borrowing by local authorities saw lower than expected public borrowing in June, figures from the Office for Budget Responsibility (OBR) show.

Borrowing in June was £18.5bn, £1.8bn above the same period but £2.7bn below the OBR's March forecast.

Meanwhile, borrowing between April and June totalled £54.4bn, £12.2bn above the same period last year but £7.5bn below earlier forecasts.

However, government net debt hit 100% of GDP for the first time since 1961, although this was 1.5 percentage points lower than expected. This, combined with higher interest rates, "has driven the weakened state of the public finances", asserted the Resolution Foundation, an independent think-tank focused on improving living standards for those on low to middle incomes.

Cara Pacitti, senior economist at the Resolution Foundation, said: "Better than expected borrowing in June, driven by higher tax receipts, caps a largely positive set of recent economic data, with inflation falling faster than expected last month.

"But the bigger picture is one of the public finances being under severe strain, with net debt hitting 100% of GDP, and the rising cost of servicing debt squeezing out other priorities for spending."

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