LONDON: Britain’s budget deficit widened to a record GBP16 billion last month, GBP6 billion worse than last August and worse

than the City of London expected, official data showed yesterday.

The news came as the chancellor (the UK finance minister), Alistair Darling, began talks with cabinet colleagues to discuss how public spending may be cut. Darling’s pre-budget report in November is likely to outline a programme to reduce the deficit sharply.

For the first five months of the fiscal year 2009-10, the UK budget was in the red to the tune of GBP65 billion — far higher than the GBP26 billion shortfall in the same period last year. The breakdown of the August figures shows tax receipts so far this year fell 11.4 per cent while government spending — on areas such as jobless benefits — is up 3 per cent.

The figures will add to growing fears that Darling’s budget forecast of a full-year deficit of GBP175 billion is likely to be exceeded as rising unemployment and tumbling tax receipts take a heavy toll. This week Prime Minister Gordon Brown admitted for the first time that his ruling Labour party would make cuts in public spending if it wins the election next year.

At the end of August, the UK public sector net debt was GBP804.8 billion, equivalent to 57.5 per cent of gross domestic product. Analysts say national debt will soon exceed 80 per cent of GDP. A year ago it was 44 per cent of GDP.