Local authority spending cuts help government to borrow less in June

Borrowing down by almost 1bn on year before as George Osborne steers course to hit deficit target of 69.5bn for 2015-16

Lower spending by local authorities provided George Osborne with a boost last month by cutting the amount the government needed to borrow to balance taxes and spending by almost 1bn to its lowest June total in seven years. Official figures showed public sector net borrowing - the Treasury's preferred measure of the deficit - stood at 9.4bn in June, down 800m on the same month in 2014.

Despite a smaller cut in borrowing last month than the City had been predicting, analysts said Osborne was on course to hit his deficit target of 69.5bn for the entire 2015-16 financial year. The independent Office for Budget Responsibility (OBR) said the June total was 700m above market expectations, with strong tax receipts offset by rising spending by Whitehall. Local government spending was 1bn lower than a year earlier.