Net borrowing hits record £16bn

The UK's public finances showed another sharp deterioration today after it emerged net borrowing soared to a record £16bn in November.

The figure, which was much greater than the £13.7bn forecast in the City, left public sector borrowing at £56.1bn for the first eight months of the financial year, compared with £29.2bn at the same stage last year.

Chancellor Alistair Darling has already warned that net borrowing could hit £118bn next year as the UK faces up to recession.

In total, borrowing between this year and 2012/13 will reach a mammoth £458bn - almost three times the level predicted in the March budget.

The UK's finances have been hit as tax revenues fall in the economic slump and benefit spending rises. Tax handouts to tackle the 10p tax row and kickstart the housing market have added to the burden.

Central Government accounts show taxes on production fell by £400m to £14.5bn in November, with taxes on income and wealth around £1.4bn lower at £10.5bn. Net spending on social benefits increased by £1bn to £14.6bn, the Office for National Statistics (ONS) said.