United Kingdom recorded a record deficit in August

United Kingdom on Friday posted a record budget deficit for August last month, due to the continuing impact of recession on government tax revenues, according to figures released Friday.

The Office for National Statistics said that the needs of public sector net cash (PSNCR, for its acronym in English) came to 10.379 million pounds in August.

The figure was less than the 12,000 million pounds expected by analysts, but double the same month last year and a record for the month of August. The figure for July PSNCR was revised up by about 1,500 million pounds.

The public sector net debt (PSNB, for its acronym in English) came to 16.119 million pounds, also lower than expected and a record for the eighth month of the year, compared to 9.876 million pounds a year ago.

"The August figure PSNB not as bad as we thought, but the fiscal situation remains very serious," said Philip Shaw, chief economist at Investec.

Public finances in Britain have deteriorated sharply in recent months as the country has to pay the cost of the worst recession in decades and the government has been forced to inject millions to rescue the banking sector, while tax revenues fell.

The public sector net debt now represents 57.5 percent of gross domestic product (GDP), a record that may go higher up, bringing the fiscal deficit is a key issue for the next election, where the two major parties are under pressure to reveal how much they are willing to cut spending

So far this fiscal year, the PSNB is at 65.256 million pounds, up from 26.122 million in the same period last year.

The government forecast an annual deficit of 175,000 million pounds, more than 12 per cent of GDP.

"The numbers today (Friday) are in line with our budget forecast," a British Treasury spokesman. "They reflect the impact of the global financial crisis on tax revenue and the steps we have taken to support the economy," he said.

The tax revenues in the period from April to August fell more than 12 percent year over year, while corporate taxes were down 33 percent.