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Date: Wednesday 20 Aug 2008

LONDON (ShareCast) - A big increase in tax receipts from North Sea Oil helped boost Britain’s public finances in July, although the coffers were still short of last year’s figure.

The government enjoyed a credit of £4.8bn last month, said the Office for National Statistics, better than expected and a big improvement on the £9.16bn deficit reported in June.

About £4bn of the £9.9bn of corporation tax was from North Sea companies, more than double the figure at the same time last year.

But the overall number is well short of the £6.4bn reported a year ago, and with net borrowing at £19.1bn already this year, analysts worry that the government will miss its target of £43bn.

Some say it could even go as high as £60bn, topping the record £51bn witnessed in 1993.

Meanwhile, net debt at the end of July stood at £542.6bn, or 37.3% of GDP, and may break the government’s “Golden Rule” on spending of 40%.

Debt peaked at 43.8% of GDP in 1997, its highest since the mid-1980s, said the ONS.

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