George Osborne on track to meet borrowing target, despite wider deficit in February

Higher departmental spending offset a slight improvement in income tax receipts, following weaker-than-expected receipts in January, according to the Office for National Statistics. Taking January and February together, income tax and capital gains receipts were 2.3pc down on a year earlier, the data showed.

This week, the OBR revised down its projections for borrowing in the current financial year to £107.8bn, from £111.2bn in December's Autumn Statement and £119.8bn in last year's Budget.

Friday's borrowing data were reflected in the OBR's new forecasts, the Treasury said, while the ONS revised borrowing for the 2013-14 financial year down by £600m.

The Treasury has borrowed £99.3bn so far this year, £4.4bn lower than in the same period in 2012/13, and downward revisions over the next five years mean the Government is on track to borrow £24bn less than forecast in December.

However, economists said structural changes to the economy meant the pace of any reduction in borrowing would be slightly slower than the OBR predicted in the Budget.

"Falls in oil and gas output, coupled with the weaknesses of the financial sector, have impacted the economy’s ability to generate tax receipts, and any future growth in public spending must be scaled down to reflect these new realities," said David Kern, chief economist at the British Chambers of Commerce. "Stabilising our public finances in the medium term remains a key condition for enabling the private sector to create wealth and continue to drive the recovery.”

Public sector net debt (PSND) rose to £1.25 trillion in February and is likely to increase further in the coming months. Changes to pan-European standards on calculating public debt will add £140bn to PSND later this year, and £3.4bn to public borrowing, according to the OBR.

Britain's debt pile now represents almost 75pc of gross domestic product (GDP).

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