Mr Gordon Brown's predictions for the British economy were cast further into doubt yesterday, as new figures showed government borrowing had overshot the chancellor's forecast of just two weeks ago by £1.2 billion (€1.72 billion).

The overshoot, for the financial year just ended, was almost entirely because of higher-than- expected spending by government departments but receipts were as predicted.

Public sector net borrowing was £25.2 billion in the year to March 31st, according to the Office for National Statistics, a sharp deterioration in the public finances from the £400 million budget surplus the previous year. It was also higher than the chancellor's budget forecast of a £24 billion deficit.

"Despite the treasury's claim that the deficit is likely to be revised down, today's data will re-ignite concerns that the treasury's borrowing figures are too optimistic for this year and next," said Mr Alan Castle, economist at Lehman Brothers.

The chancellor expects government borrowing to rise to £27 billion this year.

- (Financial Times Service)