British finance minister Gordon Brown will probably be forced to raise his borrowing forecasts next week and analysts say taxes may have to rise after the general election if he is to keep meeting his own fiscal rules.
Disappointing tax receipts and higher than expected spending mean Mr Brown will have even less leeway in meeting his Golden Rule - that he only borrows to invest over the cycle - than he had in March, when he delivers his pre-budget report next Thursday.
But with an election likely only six months away, Mr Brown seems sure to maintain that borrowing remains under control and there won't be any need either to raise taxes or cut spending, blaming any shortfall on the slowdown in the global economy.
"The most likely scenario is that he'll have a very slight deterioration in the public borrowing numbers from the March budget but will still have enough to land a claim that he'll meet the Golden Rule in this cycle," said John Hawksworth, head of economic research at PricewaterhouseCoopers.
In March, Mr Brown said he had only an £11 billion margin on the golden rule as the large surpluses at the start of the economic cycle had given way to deficits, leaving an average annual positive balance of 0.1 per cent of gross domestic product over the cycle between 1999/2000 and 2005/06.
"The problem for Gordon Brown is that, on the basis of the available numbers, the Treasury's forecasts for the current year are starting to look flaky," said Simon Rubinsohn, chief economist at Gerrard.
The total shortfall on the current budget stood at just over £17 billion in the financial year so far, some £1.5 billion higher than last year, against expectations of a halving of the deficit between 2003/04 and 2004/05.
Economists said Mr Brown could raise his projections for public sector net borrowing for this year and next by as much as £3 billion to £36 billion and £34 billion respectively.
The Treasury, however, believes that receipts from corporation tax, which is usually paid five to six months in arrears, could yet pick up as soaring energy prices have sent oil company profits rocketing.
BP Plc, which alone is said to have paid some £6 billion of tax last year, said it achieved a record half-year result and net profits surged 46 per cent to a record in the three months to September.
"We are meeting our fiscal rules both this year and next," a Treasury spokesman said.
Economists said that one option for Mr Brown to ensure that he definitely meets his own fiscal rule is to change his estimate of the length of the economic cycle.
"It could be shortened so that it concludes this financial year, thus excluding next year's projected shortfall from the Golden Rule calculation and increasing the chance that the target will be met," said Mr Rubinsohn.
Regardless, Britain's overall fiscal position remains much better than countries like the United States, France or Germany but Mr Brown has staked a great deal of his economic credibility on meeting his fiscal rules.
While he remains likely to scrape through for now, he may not be so lucky in the years to come.
"This economic cycle was cushioned by the large surpluses built up at the end of the 1990s. The big question for the next cycle is whether the likely slowdown in public expenditure will be sufficient for the government to meet its fiscal rules," said Philip Shaw, chief economist at Investec.
"Overall, our answer to that is there is a risk that taxes will have to go up but not until after the next election, the jury's out on that one," said Mr Shaw.