Rising Government spending blew an unexpected hole in the public purse in July, official figures have shown.
The Office for National Statistics (ONS) said the state had to borrow a net £488 million - the first time in three years there was a deficit rather than a surplus in July.
The public coffers usually show a surplus in July due to big tax payments by companies and individuals, but these were outstripped by an increase in spending by central government departments.
July's deficit was much worse than economists' average prediction of a £2.5 billion surplus, and they said the figures suggest Britain's improving economy has yet to boost the state's finances.
But the Treasury insisted the economy is moving from "rescue to recovery" after the ONS reported higher tax receipts.
The ONS said public sector net borrowing, stripping out distortions from bank bailouts and quantitative easing (QE) cash, swung £1.3 billion into the red in July from an £823 million surplus a year earlier.
The figures also showed underlying public sector net debt as a proportion of the UK's gross domestic product (GDP) or total output hit a record for July at 74.5%.
Martin Beck, UK economist at consultancy Capital Economics, said: "While signs of economic recovery should eventually feed through into an improvement in the public finances, it looks like the Chancellor will have to wait a while yet."
Once a transfer of around £400 million of QE cash was included, public sector net borrowing was £62 million in July - the Government's preferred measure. But this was still £885 million higher than the £823 million surplus a year earlier. The ONS said higher central government spending was spread across departments, adding that the Treasury expects this to be revised lower in coming months.
A Treasury spokeswoman said: "Strong tax receipts in July confirm that the economy is moving from rescue to recovery. There is still a long way to go as the UK recovers from the biggest economic crisis in living memory, and the Government is sticking to the economic plan that has already cut the deficit by a third and enabled the private sector to create over 1.3 million new jobs."