Alistair Darling will be forced to issue more than £200bn worth of government bonds this financial year – well above market expectations – as he concedes in today’s Budget that the public finances have plunged deeply into the red.

With public borrowing set to soar to £170bn-£180bn, the chancellor will have to tap the market for an issuance of gilts that will be well over £50bn higher than the Debt Management Office estimated last month.

This record peacetime borrowing will overshadow Mr Darling’s aim of presenting a Budget for jobs and investing in future growth. The weakness of the public finances and his plans to bring back prudence in the medium term are likely to dominate the political debate.

Financial Times