Public sector net borrowing was slightly better than expected in October at £6.5bn, down by £1.2bn compared with the same period last year and below forecasts of £6.8bn.
The lower-than-expected level of borrowing will provide a slight confidence boost for chancellor George Osborne a week before the Office of Budget Responsibility gives the official forecasts for the economy.
However, economists warned that the government's deficit-reduction goal will become increasingly difficult to achieve owing to the slowing economy.
UK GDP grew at 0.5 per cent in the first quarter of 2011, 0.1 per cent in the second quarter and 0.4 per cent in the third quarter.
“The ability to cut the deficit will invariably get more difficult in coming months due to economic growth being far weaker than the government anticipated” said Chris Williamson, chief economist at Markit.
Economists said the figures indicate that Osborne is in line to achieve his aim of reducing borrowing by £15bn to £122bn in the 2011-12 financial year.
Total borrowing figures this year from April standing at £68.3bn. Borrowing between April and September was also revised down by £1.7bn.
“Based on the first seven months of fiscal 2011/12, the Chancellor is actually on course to slightly better his full year targets.” said Howard Archer, chief UK economist at IHS Global Insight.