Concerns over the precarious state of the government’s public finances were mounting yesterday in a worsening economic downturn and fresh figures showed growth rate of income tax revenues halving last month.

Moreover, official figures showed the Treasury’s net borrowing in the four months ending in July soared to £19.1bn – up from £10.7bn in the same period last year, The Times reports.

The net surplus of the public finances for last month totalled £4.8bn but this was sharply lower than the £6.4bn surplus registered a year ago, according to Office for National Statistics reports.

Economists warned the underlying deterioration in the public finances was underpinned by the low 2.9% rise in tax revenues in the financial year to date compared with the same period last year – considerably below the 4.8% rise in tax receipts factored in by the Chancellor.

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