Anyone for Plan B? Or just for knuckling down on fiscal cuts? This is not what the market was expecting from the latest UK public finances data on Tuesday â Â£22.8bn of public sector net borrowing in November, versus consensus forecasts of Â£17bn. Which has left us with the biggest public sector deficit on current budget since records began and also the biggest public sector net borrowing (PSNB) figure since records began. This presents quite a reality check on whether UK austerity has bitten yet â and whether it really can work over the make-or-break 2011/12 fiscal year. Full details via the Office of National Statistics: Provisional estimates of the public finances show that the public sector had: â¢ a current budget deficit excluding the temporary effects of financial interventions of Â£19.9 billion in November 2010 (a deficit of Â£19.4 billion including interventions) â¢ net borrowing excluding the temporary effects of financial interventions of Â£23.3 billion in November 2010 (Â£22.8 billion including interventions For measures excluding financial interventions: the public sector current budget was in deficit by Â£19.9 billion; this is a Â£6.0 billion higher deficit than in November 2009, when there was a deficit of Â£14.0 billion; public sector net borrowing was Â£23.3 billion; this is Â£5.9 billion higher than in November 2009, when net borrowing (excluding financial sector intervention) was Â£17.4 billion; public sector net debt at the end of November 2010 was Â£863.1 billion (58.0 per cent of GDP) up from Â£708.6 billion (50.0 per cent of GDP) at the end of November 2009 Hereâs a chart of HM Governmentâs accounts which might be of particular interest (click to enlarge): It shows that interest payments rose to Â£4.5bn from Â£3bn on a year-to-year basis â or by 50 per cent, while current receipts have only really crept forward. Therein was the UKâs fiscal problem. Howard Archer of IHS Global Insight noted both points on Tuesday. As he observed (emphasis ours): The public finances were truly horrible and much worse than expected in November. This is dire news for Chancellor George Osborne to digest over Christmas and is likely to reinforce the governmentâs belief that there must be no let up in the fiscal consolidation efforts. Indeed, there is now a very serious risk that the government will miss its fiscal targets for 2010/11. Much will depend on how well growth holds up over the rest of the fiscal year, and any serious hit to economic activity coming from the prolonged bad weather will only make things harder. A tiny crumb of comfort for the government is that the public finances still show marginal overall improvement during fiscal year 2010/11. Specifically, the PSNBR excluding financial interventions edged down to Â£104.4 billion during April-November from Â£105.1 billion a year earlier. Nevertheless, if current trends are replicated over the whole fiscal year the PSNBR would come in around Â£155 billion, meaning that Chancellor George Osborne would miss his target PSNBR of Â£149 billion in 2010/11. In late November, the Office for Budget Responsibility edged down the forecast PSNBR in 2010/11 from Â£149 billion to Â£148.5 billion. And with data like these you really have to wonder what happens to the UK austerity experiment in 2011. Itâs a year thatâs promising reflation, interest rate rises, more worries in the big trading bloc next door to the UK â and throughout, feeble growth. That is not a great outlook for the government, we think. And letâs not even go into the eurozone exposure facing Her Majestyâs banks. At least the Treasuryâs response to the figures wins points for spinning bad news into good: RTRS-UK TREASURY-NOV PSNB DATA SHOWS WHY GOVT HAS HAD TO TAKE DECISIVE ACTION TO TAKE UK OUT OF FINANCIAL DANGER ZONE Just consider whether we might still be walking into another one. http://ftalphaville.ft.com/blog/2010/12/21/443766/uk-fiscal-fail/ Fiscal desaster made in the UK...Maybe a hgher bank tax would help?