21/11/2012 05:17 GMT | Updated 21/11/2012 06:02 GMT

George Osborne's Deficit Reduction Targets Hit By Poor Borrowing Figures

Chancellor George Osborne's deficit reduction plans were dealt a blow on Wednesday after figures showed public borrowing not decreasing as the government had hoped.

Public sector net borrowing, excluding financial interventions such as bank bailouts, was £8.6 billion in October, a total of £2.7bn more than October last year.

The figures mean the chancellor is less likely to be able to reach his target of £120bn of borrowing for 2012/13.

Some believe Osborne will overshoot that target by a few billion pounds – claiming less private spending is leading to the government borrowing more to plug the gap.

george osborne

The chancellor's target of borrowing £120bn in 2012/13 is looking much less likely

The chances of the chancellor altering the deficit target were heightened by the poor figures and if Osborne sticks to his current debt target, he could be face the unpopular decision of announcing potentially large tax rises and further spending cuts in December.

Public sector borrowing for the year to date is £73.3bn, excluding a one-off £28bn boost from the transfer of the Royal Mail pension fund into Treasury ownership, which is £5bn higher than the same period last year.

Within the October figures, the picture was much the same as previous months, with government spending outstripping tax receipts.

Public sector net debt was £1.1 trillion at the end of October, equal to 67.9% of gross domestic product (GDP), compared with £971bn or 63.4% of GDP last year.