Highest government borrowing in August for five years

UK government borrowing in August hit the highest level for the month in five years, according to the latest official figures.

Borrowing - the difference between public spending and tax income - was £18bn in August, the Office for National Statistics (ONS) said. That was up £3.5bn from the same month last year and higher than analysts had been forecasting.

The UK statistics body said that while tax and National Insurance receipts increased, they were outstripped by higher spending on public services, benefits and debt interest.

Borrowing over the first five months of the financial year has now reached £83.8bn, the ONS said, which is up £16.2bn from the same period last year.

The borrowing figure for August was higher than expected. The government's official forecaster, the Office for Budget Responsibility, had predicted £12.5bn while City analysts were expecting £12.8bn.

Paul Dales, chief UK economist at Capital Economics, said the latest figures, "highlight the deteriorating nature of the public finances even though the economy hasn't been terribly weak".

He added that this would contribute to the chancellor having to money in November's Budget, "mostly through higher taxes".