Public finances sink further into the red
The Treasury's coffers are now £12.4bn in deficit for the first six months of the financial year, according to the latest government economic data.
Link: UK Budget deficit may push up taxes
The size of the deficit was the result of a combination of lower tax receipts and a surge in public spending. Government spending climbed 8% in the six months to September, as money was pumped into the ailing NHS and other public services.
The reduction in tax receipts was due to smaller tackings of corporate tax as companies recorded lower levels of profitability.
City experts now say the chancellor will be forced to downgrade growth prospects, as the deficit is already worse than £11bn forecast by Gordon Brown in his Budget speech earlier this year. There are also fears he may be forced to raise taxes as a result of the deficit.
In his Budget speech, Brown forecast growth at between 3% and 4% for the year.