Economy suffers first October deficit in ten years

Public sector net borrowing hit a £751m deficit in October, compared with a predicted £1.1bn surplus, figures from the Office for National Statistics have revealed.

Chancellor Gordon Brown recently insisted that the Government would meet all of its fiscal rules, in response to speculation that he could stand to break his self-imposed Golden Rule.

However, the latest figures show that increased Government spending offset the rise in income from tax receipts in October, making the first recorded October deficit since 1994.

Experts have warned that the Chancellor is likely to need to revise his budget deficit predictions for 2004/05 upwards.

The Chancellor is due to give a statement on the economy as part of his Pre-Budget Report, which will be delivered on 2 December.