Public sector borrowing reached a record high of £15.9bn in August, according to the Office for National Statistics (ONS).

This figure is higher than economists had predicted and comes after higher inflation led to a rise in interest payments on index-linked government bonds. The latest figure means borrowing in the first five months of the financial year has reached £58.1bn.

The figures exclude the impact of financial interventions by the government, which reduce overall borrowing because of profit contributions from the part-nationalised banks.

"These figures have deteriorated when compared with a year ago, despite expectations that we would see an improvement. This reinforces the need for the government to persevere with a credible strategy aimed at restoring stability to our public finances," said David Kern, chief economist at the British Chambers of Commerce.

"British business accepts the need for difficult measures over the next few years to reduce the unsustainable deficit, and supports the government's focus on spending cuts rather than tax rises. However, this policy will only achieve success if austerity measures are supplemented by support for businesses to enable them to deliver growth, investment and create jobs."