Borrowing figures mean it's too early to call recovery

After some more chipper statistics last week, a healthier high street and better unemployment figures revealed the week before, there was a reminder this morning for the government and the rest of us that it is far too early to call recovery.

Public borrowing figures just published are worse than thought. City number crunchers were expecting a surplus of some £2 billion, but, in fact in July the government borrowed £600 million.

That's despite the fact that July is traditionally a good month for the government coffers. And on top of that, borrowing between April and June was revised up by £1.4 billion.

Treasury officials explain the disappointing news by pointing to poor returns in corporation tax (what business is putting into the public purse).

And what might surprise you: an increase in central government spending of 3.5 percent so far this year.

That includes a striking increase of 7 percent in spending on benefits, which is more than forecast.

These figures threaten to push the government further off its plan to achieve its central mission: dealing with the deficit and driving down public spending.

More spending and more borrowing are the opposite of what they hope to achieve.