The public sector budget deficit was higher than expected in March, but downward revisions in previous months enabled the government to meet its full-year target, the Office for National Statistics said on Tuesday.
The Office for National Statistics said public sector net borrowing excluding financial sector interventions - the government's preferred measure - rose last month to 18.174 billion pounds from 17.951 billion pounds in March 2011.
This was well above economists' average forecast in a Reuters poll of 16.0 billion pounds but only took borrowing in the 2011/12 fiscal year to 125.974 billion pounds, a whisker below the government's target of 126 billion pounds.
As a percentage of GDP, this measure fell to 8.3 percent in 2011/12 from 9.27 percent in 2010/11, also in line with government forecasts.
Public sector net debt excluding financial sector interventions rose to 1.0225 trillion pounds in March, equivalent to 66 percent of GDP, the highest since records began in 1993.
The government aims to largely eliminate Britain's budget deficit, which was a record 11 percent when it came to power in 2010, over the next five years. So far, markets have given the Conservative-led government the benefit of the doubt and most analysts reckon it will achieve its aim of reducing its overall budget deficit to 120 billion pounds in the current 2012/1 3 fiscal year.
But that could change if the euro zone situation takes a turn for the worse and Britain slides into a deep recession.
Official data on Wednesday is expected to show the economy skirted recession, recording growth of 0.1 percent in the first three months of this year after shrinking by 0.3 percent at the end of 2011.
In a sign that the austerity drive is starting to bear fruit, Other current expenditure, which largely consists of departmental spending, fell in fiscal year 2011/12 for the first time since 1955.
(Reporting by Fiona Sheikh and David Milliken)