Britain's public finances showed a much bigger than expected deficit in September, a setback for finance minister Philip Hammond as he prepares to deliver the country's first budget plans since the Brexit vote.
Investors are nervous about the prospect of an acrimonious British departure from the European Union.
Today's figures may limit Hammond's ability to cushion the blow of the referendum result via higher spending or tax cuts.
Britain ran a budget shortfall - excluding state-owned banks - of £10.6 billion last month, 14.5% higher than the deficit in the same month last year, the Office for National Statistics said.
The deficit was above all forecasts in a Reuters poll of economists, which had produced a median projection of an £8.5 billion shortfall.
Despite falling from more than 10% of economic output in 2010 to 4% in the last financial year, Britain's budget deficit remains among the highest for any developed nation.
Hammond, responding to the figures, reiterated his message that he will bring down the budget deficit more slowly than his predecessor George Osborne had planned.
"We remain committed to fiscal discipline and will return the budget to balance over a sensible period of time, in a way that allows us the space to support the economy as needed," he said in a statement.
But the slow improvement of the public finances in the year to date, combined with an expected slowdown in the economy next year that will hurt tax revenues, represents a constraint for Hammond as he prepares his November 23 Autumn Statement.
He has said any extra spending on infrastructure projects was likely to be modest, disappointing some economists who said he could be bolder with government borrowing costs so low.
Economists said Hammond would probably want to keep some room for a loosening of the purse strings once Britain actually leaves the EU which will probably be shortly before the next election.
As a result, they think the Chancellor will scrap the 0.8% of GDP fiscal tightening planned for 2017, but will not set fiscal policy to boost growth and will ensure that the fiscal consolidation resumes thereafter.
The weak September figures took the deficit in the first half of the financial year to £45.5 billion, down nearly 5% from the same period in the previous year but already close to the £55.5 billion forecast for the 2016/17 tax year as a whole by Britain's budget watchdog in March.
The ONS said that receipts from corporation tax and property transactions both fell in September compared with the same month last year, while growth in value-added tax receipts was slower than earlier in the year.
It was the first fall in corporation tax revenues for the month of September since 2009, the ONS said, adding that it was unable to provide a reason for the fall.
Analysts said the weak corporate tax and stamp duty receipts might be a sign that the Brexit vote was starting to have an impact on the public finances.
The growth in VAT receipts was the slowest for the month of September since 2012.
