British public sector net borrowing worsened unexpectedly in May, official data showed on Wednesday, one week before finance minister Gordon Brown becomes prime minister.
Public sector net borrowing (PSNB), the government's preferred measure of the public finances, widened to 8.2 billion pounds (12.2 billion euros, 16.3 billion dollars) in May from 7.7 billion pounds a year earlier.
The Office for National Statistics said state spending had increased faster than tax receipts in May. Analysts had forecast an improvement to 7.0 billion pounds in May, which is the second month of Britain's fiscal year.
Data for April and May combined, however, shows an improvement on the same period in 2006. Analysts said this would be seen as a relief for whoever replaces Brown when he takes over from Tony Blair on June 27. Blair is stepping down as prime minister and leader of the Labour Party after ten years in power.
"It is a little early in the year to be talking about trends, but the Treasury's forecasts look okay for now," Investec economist David Page said. For the first two months of the fiscal year, public sector net borrowing stood at 9.4 billion pounds, compared with the 9.7 billion pounds at the same stage a year earlier.
Meanwhile the public sector net cash requirement (PSNCR) in May - the government's less preferred measure of public finances - recorded a deficit of 6.2 billion pounds in May.
This compared with a shortfall of 7.5 billion pounds a year earlier and market expectations of a 7.0 billion-pound deficit. In April, the start of Britain's fiscal year, the PSNCR showed a surplus of 3.5 billion pounds.