City stunned as borrowing rises to a record £23.3bn

New figures heaped more pressure on the Government's borrowing targets yesterday after Britain slumped into the red by a record £23.3bn in November.

Health and defence spending and higher European Union payouts ensured the monthly figure – excluding financial interventions by the Government – beat the 17.4bn borrowed a year earlier by a margin of 5.9bn.

Some economists warned the coalition is now in danger of exceeding the annual target set by the tax and spending watchdog, while the Treasury said the figures reinforced the need for its belt-tightening austerity measures.

Chancellor George Osborne is likely to seize on the bigger-than-expected figures as proof of the need for his 81bn package of spending cuts and planned hike in VAT early next year.

The latest figures from the Office for National Statistics (ONS) stunned the City as analysts were braced for a figure in the region of 17bn.

Total public borrowing for the year to date now stands at 104.4bn, the ONS said, creeping closer to the Government's target of 148.5bn for the financial year to March 31, which is based on the Office for Budget Responsibility's recently downgraded forecast.

It also brought net debt to 863.1bn, which represents 58 per cent of gross domestic product – another monthly record.

Jonathan Loynes, chief economist at Capital Economics, said based on November's figures, borrowing is likely to total about 155bn in the fiscal year 2010-11 as a whole, some 7bn above the OBR's latest forecast.

He said: "Given that the economy has expanded rather more quickly than the OBR anticipated over recent quarters, current borrowing might have been expected to come in rather lower."

He added: "Overall, there is nothing here to weaken the Government's determination to see through its austerity programme. But we continue to doubt that the economy will weather the coming fiscal storm as well as it hopes."

Howard Archer, chief UK and European economist at IHS Global Insight, said the figures were "truly horrible".

He said: "There is now a very serious risk that the Government will miss its fiscal targets for 2010/11.

"Much will depend on how well growth holds up over the rest of the fiscal year, and any serious hit to economic activity coming from the prolonged bad weather will only make things harder."

While total tax revenues are increasing, economists have warned the Government is battling against ever-increasing interest payments on its mammoth debt levels. This month was no exception with interest payments rising nearly 50 per cent to 4.5bn.

But the Government still has four months to hit its target and Allan Monks, economist at JP Morgan, said it is still achievable. A spokesman for the Treasury said the figures backed the Government's fiscal-tightening measures.