Borrowing at record high in UK

Borrowing in the nine months of the year so far has reached £43.6bn (€58.57bn) - £11.4bn (€15.3bn) more than at the same stage last year.

Economists said that British Chancellor Alistair Darling was now set to miss his £38bn (€51bn) borrowing target for the current financial year.

Global Insight's chief UK economist Howard Archer warned of "markedly slower growth" undermining VAT and corporation tax receipts, with a softening housing market also hitting income from stamp duty.

He added: "Mr Darling looks likely to have a very uncomfortable time when delivering his first budget in March.

"It looks odds-on that he will either have to announce significant tax raising measures or public spending cuts at a time when the economy is faltering markedly."

The British Treasury's net borrowing targets of £36bn (€48.4bn) in the 2008/09 financial year were also under threat following today's figures, Mr Archer said.

The Office for National Statistics (ONS) showed corporation tax and VAT revenues falling in December compared to a year earlier, with only modest gains in income tax and national insurance receipts.

Total current spending of £42.8bn (€57.5bn) last month outstripped receipts of £40.3bn (€54.1bn), according to the ONS.

Other experts said the British Government would pin its hopes on increased revenues this month.

Royal Bank of Scotland chief economist Geoff Dicks said: "The public finances are still showing no sign of improvement. January is a key month for tax receipts so the full-year out-turn could be better than this - though weaker City bonuses argue the other way."

Today's figures come amid darkening clouds over the UK economy. Ernst & Young's Item Club predicts the Bank of England will cut interest rates at least three times this year in an attempt to avert a recession.

Official figures on Friday also confirmed a bleak Christmas on the high street with a 0.4% drop in sales volumes in December.