Labour's borrowing 'means UK deficit could beat Greece'

City experts today warned that Britain's budget deficit could exceed that of crisis-hit Greece this year after a shocking jump in borrowing last month.

Official figures showed that the Government borrowed £4.3 billion in January, a month when it usually racks up a surplus thanks to a flood of tax receipts.

It put Britain on target to borrow £180 billion this year, or 12.8% of gross domestic product, compared with the Greek deficit of 12.7%. The pound dived 0.77 cents to $1.5595.

Financial markets and credit rating agencies still believe the UK is more financially secure than Greece and other troubled eurozone nations. But economists warned that the markets will soon lose patience unless UK debt levels are slashed.

David Page of Investec said: "The task of the next government will be to repair the public finances and restore a path of fiscal rectitude. We remain convinced that this requires a sharper fiscal tightening than envisaged in the Pre-Budget Report."

City commentator David Buik, of BGC Partners, said: "This number is a shocker and does not augur well for public finances going forward. This deficit only goes to highlight the gargantuan task that lies ahead of the next government to put its fiscal house in order."