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Borrowing jump throws Osborne off course

Chancellor George Osborne's hopes of slashing the government's borrowing will be dealt a blow today as the double-dip recession weighs heavily on the public finances.

Public sector net borrowing, excluding financial interventions such as bank bailouts, is expected to be between £16bn and £16.5bn, compared with £15bn in May last year.

While May is only two months into the financial year, the weak figures will trouble the Chancellor who is aiming to trim total borrowing in 2012/2013 to £120bn, excluding a one-off boost from the transfer of the Royal Mail pension fund into Treasury ownership.

May's borrowing figure will be hit by a lack of tax receipts, which analysts said was a consequence of the recession and sluggish economic recovery.

April's borrowing figures were flattered by a one-off £28bn lift from the value of assets transferred from the Royal Mail pension plan.

But excluding this one-off impact, the Government actually recorded public sector net borrowing, excluding financial interventions such as bank bailouts, of £11.5bn - £3bn higher than City forecasts.