THE UK faces tax hikes and spending cuts after government debt soared to its highest level since records began, borrowing £5,000 a second.
Net debt is now nearly £800 billion, with borrowing rising in one month by £13 billion – or £213 for every citizen.
Meanwhile burgeoning government spending, up 11 per cent year-on-year since June, from £44.2 billion to £49bn was met with a bigger
drop in total tax receipts of 5.7 per cent, to £35.5bn. Analysts said drastic action would be needed to get the national debt under control, which is 56.6 per cent of national income.
The leading think-tank, the Centre for Business and Economic Research (CEBR), is forecasting government spending will need to be slashed by £80bn with tax hikes of £20bn introduced to sort out UK finances.
The dire figures from the Office of National Statistics emerged as shadow foreign secretary William Hague said Britain risked losing its authority in the world because of Gordon Brown's "catastrophic" handling of the economy.
In a speech on the future of British foreign policy, Mr Hague said: "One of the damaging effects of Gordon Brown's catastrophic stewardship of Britain's finances, and of additionally reducing Britain from second to twelfth place in the international league of competitiveness according to the World Economic Forum, is the diminishing of our economic power and by extension the effectiveness of our international role."
Chancellor Alistair Darling has forecast that the black hole will hit £175bn this year but economists believe it will reach £200bn.
Liberal Democrat treasury spokesman Vince Cable called on Mr Darling to be open about the serious measures needed to get the economy back on track, as such high levels of borrowing were unsustainable.
"If the Chancellor expects to have any credibility, both with the markets and the public, he must be brutally honest about how he intends to deal with levels of borrowing," Mr Cable said.
"However, such a commitment to deal with the deficit cannot come from salami slicing key public services, but through an honest debate about what the state can and cannot afford to do."
In a further sign of the strength of the recession, income tax receipts were down, company tax receipts were down 14 per cent on last year and the take from VAT was also down by 16 per cent.
Welfare costs were also up by almost ten per cent in June to £13.3bn.
Despite the dire figures, the ONS data was actually less negative than predicted by analysts.
The pound slumped against the dollar and euro on the news emerging.
Corin Taylor, senior policy adviser at the Institute of Directors, said: "The government will have to get serious about reducing the deficit as soon as the recovery takes hold. There will be few areas of public spending that can remain entirely immune from cuts — the risks to the country's solvency are too great."
Howard Archer, at IHS Global Insight, said: "Whether or not the Chancellor does achieve his target this year, it does not alter the fact that extended, further major fiscal tightening measures will have to be introduced to get the public finances back to a sustainable state over the long term," he said.
Vicky Redwood, of Capital Economics, said: "June's UK public finances figures are a touch better than expected, but do absolutely nothing to alter the big picture that they are in a dreadful state."
But the Prime Minister's spokesman said the UK still had lower net debt than other comparable economies.
"Obviously our economy, like all economies, has been affected by the global recession.
"We got hit particularly because of the large size of our financial sector and the contribution that makes to the finances.
"But we went into this global recession with lower levels of net debt than many other countries and we will still have lower net debt than the US, Germany and the eurozone as a whole."
