Chancellor of the Exchequer Alastair Darling faced more grim economic news yesterday after official figures showed a bigger than expected jump in public borrowing during May.

Chancellor of the Exchequer Alastair Darling faced more grim economic news yesterday after official figures showed a bigger than expected jump in public borrowing during May.

Net borrowing stood at £10.955bn - the highest amount for the month of May since 1993 - in a sign of the worsening public finances, the Office for National Statistics figures showed.

The public sector net cash requirement, which came in at £10.987bn, was the highest for May since 1984.

The poor borrowing data followed a surge in inflation to 3.3% in May, forcing Bank of England Governor Mervyn King to write an explanatory letter to Darling on Tuesday.

The ONS report also added £2.3bn to the April borrowing figures. This leaves net borrowing at £12.7bn so far in the current financial year - £4.4bn ahead of the previous 12 months.

The official figures showed growth in current government spending running ahead of tax receipts, adding to the pressure on the public finances. Spending was £1.5bn higher than a year ago, compared to a £1bn rise in receipts.

Howard Archer, chief UK and European economist at Global Insight, said the figures were bad news for Darling.

"The public finances were markedly weaker in May compared to a year earlier, thereby reinforcing belief that the Chancellor is set to miss his fiscal targets for 2008/09 by a substantial margin. Tax receipts were largely disappointing in May, although this admittedly followed a relatively healthy take in April."

Archer added: "There seems little doubt that the bad news on the public finances will continue over the coming months. Markedly weaker economic growth will take an increasing toll on VAT and corporation tax receipts over the coming fiscal year, while substantially lower housing market activity and falling house prices will hit stamp duty receipts. This will likely outweigh the boost to tax revenues from high oil prices."

In a separate report, the Council of Mortgage Lenders said British gross mortgage lending in May fell 2% on the month to £25.5bn. That left lending 19% down from the £31.5bn high in May 2007.