UK government net borrowing totalled £11.6 billion last month, a figure 6.2 per cent higher than this time last year despite ministers’ debt reduction measures.

Figures from the Office of National Statistics (ONS) will be a headache for the chancellor, George Osborne, who has made debt-reduction a key pillar in the government’s economic policy.

The increase in borrowing comes despite falling unemployment and an expanding economy. Economists blamed low tax receipts for the scarcity of public money.

Income tax receipts and social security payments increased by just 1.6 per cent year-on-year in August, not enough to balance the books. During the current tax year, takings have actually fallen 0.6 per cent so far.