"These are pretty ghastly figures and come as somewhat of a surprise," said Andrew Goodwin, senior economic adviser to the Ernst & Young Item Club.
"January usually yields a healthy surplus due to receipts from corporation tax and, even in the current climate, it is surprising to see the government rack up a deficit."
For quite a while now, we've been saying that the optimistic growth assumptions that the Treasury are basing their borrowing forecasts on are a bad idea. The crisis we're in now is largely the result of governments, banks and even individuals basing their plans on too optimistic a view of the future; on a sense that "boom and bust" really had been abolished or at least restrained to something manageable and less threatening than it had been in the past. We shouldn't repeat that mistake.
The combination of this higher than expected borrowing, which suggests the economic recovery is even more fragile than we thought, with high inflation is particularly worrying. First, because it will revive old memories of stagflation. Second, because a weak economy with high inflation means particularly sharp pressure on living standards.
A responsible Government would be cutting spending (we'll be talking about how they can do that in our upcoming book) to restore economic confidence and making any changes to fiscal and regulatory policy they can to make Britain an easier, more attractive place to invest and do business. That way we can start turning the economy and the finances around.