Government borrowing rose by more than expected, to £10.6bn in September, according to figures from the Office for National Statistics (ONS).
The figure was £1.3bn higher than the same month last year. For the financial year to date between April and September, borrowing fell by £2.3bn to £45.5bn.
The monthly figure had been expected to shrink to £8.5bn and economists said it would set the tone for the Autumn Statement on 23 November.
Paul Hollingsworth, UK economist at Capital Economics, said he expected Chancellor Philip Hammond “to announce a fairly disappointing set of fiscal forecasts” next month.
He said: “The latest outturn puts the public finances well off track to meet the Office for Budget Responsibility’s (OBR) March forecast.
“Indeed, if the public finances continued on the current trend in the fiscal year to date, then borrowing would overshoot the OBR’s forecast of £55.5bn for the fiscal year as a whole by around £17bn.”
The ONS also said that Britain’s public sector net debt rose by £39.5bn in September to £1.6 trillion, equal to 83.3% of total GDP. Mr Hammond has already indicated that he will “reset” Britain’s post-Brexit economic policy away from his predecessor George Osborne’s aim of reaching a surplus by 2020 towards more investment in areas such as infrastructure.
In a statement, Mr Hammond said: : “We have already made significant progress in bringing the public finances under control, reducing the deficit by almost two-thirds since 2010, but our debt and deficit remain too high.
“We remain committed to fiscal discipline and will return the budget to balance over a sensible period of time, in a way that allows us the space to support the economy as needed.”
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