Economy 21 August 2013 Osborne's deficit keeps growing Despite the return of growth and no shortage of austerity, the deficit was £1.3bn higher in July than at the same point last year. Sign up for our weekly email * Print HTML Despite the recent run of positive economic data, today's borrowing figures show that the coalition's deficit reduction plan remains off track. Borrowing in July (excluding financial interventions and the QE coupons from the Bank of England) was £0.5bn, £1.3bn higher than in the same month last year when it stood at £-0.8bn, and higher than the market forecast of a £2.5bn. So far this financial year, the deficit is £36.8bn compared to £35.2bn at this stage last year. The Treasury has responded by pointing out that government spending was higher than usual due to local government accounting changes and timing changes for some departments, and that underlying tax receipts are by up 3.4%. But even taking this into account, the figures remain poor. After all, there has been no shortage of austerity. Infrastructure spending has fallen by 42 per cent, VAT has risen to 20% and 423,000 government jobs have been cut, so that the public-sector workforce is at its lowest level as a share of employment since 1999. Despite all this, progress on deficit reduction has stalled. As for the national debt, which Cameron falsely claimed the government was "paying down", it's now passed the £1.2trn mark (75% of GDP), the highest level since the late 1960s. › Agony aunts are relics from another time - it's time to kick them to the kerb George Osborne plays with Titas during a visit to a nursery in Hammersmith on August 5, 2013 in London. Photograph: Getty Images. George Eaton is political editor of the New Statesman. Subscribe from just £1 per issue More Related articles How the Democratic National Committee Chair contest became a proxy war Sooner or later, a British university is going to go bankrupt Commons confidential: Old friend or foe?