Osborne 'faces £10bn borrowing blow' as UK's AAA credit rating 'increasingly at risk' Official figures showed the government borrowed £97.6billion in the first 10 months of the financial year Chancellor could now face the humiliating task of admitting in next month's Budget that the annual deficit will rise again this year instead of fall George Osborne's deficit-busting plans were hanging by a thread last night amid warnings that the country is sinking deeper into the red George Osborne's deficit-busting plans were hanging by a thread last night amid warnings that the country is sinking deeper into the red. Official figures showed the government borrowed £97.6billion in the first 10 months of the financial year - £5.3billion more than at the same stage of 2011-12. The Chancellor could now face the humiliating task of admitting in next month's Budget that the annual deficit will rise again this year instead of fall from £121billion to £119.9billion. An increase in borrowing this year - the first under the Coalition - would be a bruising setback for Mr Osborne and could see Britain stripped of its gold-plated credit rating. The Chancellor has staked his reputation on eliminating the record £159billion deficit racked up by Labour and safeguarding the country's coveted AAA status. But Chris Williamson, chief economist at financial research group Markit, said borrowing could be as much as £10billion higher than planned this year. 'With just two months of the tax year remaining, borrowing is still up on last year and the government's target for the looks likely to be missed,' he said. 'The UK's AAA credit rating is looking increasingly at risk.' The figures from the Office for National Statistics showed the government raised £11.4billion to pay down debt last month thanks in part to a controversial cash-raid on the Bank of England. January is often a 'surplus' month - the government raised £6.4billion in January 2012 - due to an influx of tax receipts from business and the self-employed. But the coffers were further boosted by a £3.8billion transfer of profits from the Bank of England's quantitative easing programme to the Treasury. Labour said the raid amounted to an attempt to flatter the picture through 'smoke and mirrors', although even without the extra cash, the surplus would have been £1.2billion larger than last year. But analysts warned it was not enough to put the Chancellor's plans back on track. It came just a day after auction of the 4G mobile phone network raised £1.2billion less than expected. The country's independent Budget watchdog said tax revenues will have to grow strongly in February and March or spending will have to be cut sharply for the Treasury to meet its goals. The Chancellor could now face the humiliating task of admitting in next month's Budget that the annual deficit will rise again this year instead of fall from £121billion to £119.9billion 'Borrowing would have to be £6.4billion lower than last year in the final two months of 2012-13,' said the Office for Budget Responsibility. Pressure is mounting on the Chancellor to take drastic action to kick-start the recovery in the Budget next month and stave off a triple-dip recession. The downturn - the longest on record - has hit tax receipts and driven up welfare payments. Corporation tax receipts were 13.5 per cent lower last month than in January 2012 while benefits payments were 8.4 per cent higher. The Treasury insisted the ONS borrowing figures 'show an improvement on last year' and followed Wednesday's news that employment is now at a record high of nearly 30million. A spokesman said: 'The road ahead will be difficult, but the economy is on the right track. The deficit has been cut by a quarter in two years and over a million private sector jobs have been created. But Labour MP Chris Leslie, shadow financial secretary to the Treasury, said: 'Strip away the smoke and mirrors, like the transfer of cash from the Bank of England, and underlying borrowing so far this year is rising and is £5.3billion higher than the same period last year. By failing on growth and jobs, David Cameron and George Osborne are failing on the one test they set themselves - to get the deficit and debt down. We urgently need a change of course from this Government. The ONS said the national debt was £1.16trillion at the end of January, the equivalent to 73.8 per cent of national income and £46,500 per household. It was £305billion in January 2001 and £843billion when the Coalition came to power. David Tinsley, UK economist at BNP Paribas, said: 'There isn't much to cheer here. The figures are being flattered by one-offs, but the big picture is the consolidation effort stalled in 2012-13. There may be a storm brewing if the economy doesn't show some growth soon.'