Osborne's budget challenge deepens as deficit worsens in November British public finances unexpectedly deepened in November, adding to Chancellor George Osborne's already tough challenge of hitting his budget deficit target this year. Headline public borrowing rose to £14.2 billion.

"Barring a Christmas miracle, the Chancellor looks extremely unlikely to meet his borrowing forecasts this year," Capital Economics economist, Pau Hollingsworth, said.

Osborne is aiming to turn Britain's budget deficit into a surplus by the end of the decade which would bolster his credentials as a possible next prime minister and allow for income tax cuts before elections in 2020.

After yesterday’s data, the deficit in the first eight months of the financial year was already close to the fullyear target.

The Office for National Statistics (ONS) said the comparison with November 2014 was distorted by about £1.1 billion in fines paid last year by financial institutions caught in a foreign currency trading scandal.

Also, Britain paid about £1 billion more to the European Union in November this year than it did in the same month last year and it spent about the same amount more on public investment, the ONS said.

On the positive side for the government, tax revenues continued to rise, part of an encouraging trend for Osborne after Britain's economic recovery failed initially to bring in much more income tax.

For the first eight months of this tax year, public sector net borrowing was 8.9 per cent lower than between April and November 2014 at £66.9 billion.