Public finances show biggest monthly deficit for August on record

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budget deficit widened to the biggest on record for August, data showed today, as public sector borrowing excluding financial sector interventions peaked at £14.41bn last month.

Borrowing rose from £14.46bn in August 2011, the Office for National Statistics said today, marking the highest August since records began in 1993.

A fall in corporation tax receipts and a rise in benefit payments were behind the jump.

It took borrowing in the fiscal year to date to £31bn, down from £48.44bn in the April-August period 2011.

The government had originally planned to eliminate the structural budget deficit by 2015 with a tough programme of spending cuts and tax rises.

Howard Archer, chief UK and European economist at IHS Global Insight, said today: "It is likely in the Chancellor's autumn statement that he will either have to acknowledge that he will be unable to start bringing down debt as a percentage of GDP by 2015/16 or announce further fiscal tightening measures."