Public sector borrowing, excluding financial interventions such as bank bailouts, fell to £18.1bn in November, which is £2.3bn lower than the previous year
Chancellor George Osborne inched closer to meeting his deficit reduction targets despite mounting fears over the strength of the economy.
Public sector borrowing, excluding financial interventions such as bank bailouts, fell to £18.1bn in November, which is £2.3bn lower than the previous year, and below the City's expectations of £19.7bn.
However, this was tempered after borrowing in the previous seven months of the government's financial year was revised upwards by £1.9bn as a result of fresh data from local councils.
The fall in borrowing in November, which was driven by higher tax receipts amid the new levy on banks and the increase in VAT to 20%, leaves the government broadly on course to meet the full-year borrowing target of £127bn set by the Office for Budget Responsibility.
But there are fears that the government's deficit reduction plans could yet be derailed amid rising unemployment and predictions that the UK's economy is on the brink of another recession.
This threatens to reduce the government's tax income and saddle it with higher benefits bills.
The importance of the government hitting its borrowing target was outlined by rating agency Moody's on Tuesday night, which confirmed the UK's cherished AAA credit rating but warned the government's austerity measures needed to stay on course for it to be retained.