'Extraordinary borrowing'

Alan Clarke, UK economist at BNP Paribas, a French bank, said: "It wasn't a terrible number on the day ... but it doesn't change the bigger picture that public sector finances are in bad shape."

In the April to June period, public sector net borrowing stood at $68bn, nearly double the level in the same period a year ago.

Alistair Darling, Britain's finance minister, has forecast borrowing for the full year of $288bn, a record post-war high - but several economists say $312bn is more likely.

Mervyn King, the governor of Britain's central bank, recently said the government's borrowing levels were "extraordinary".