The UK government borrowed £18.3bn in August, almost a fifth more than the same month last year, according to the Office for National Statistics (ONS). That's more than official forecasters expected, which is a polite way of saying the Chancellor's spreadsheet has developed a red warning light.

The culprit? Persistently higher inflation, which pushed up overall spending. Inflation rose to its highest rate in five months in August, driven by higher petrol and diesel prices. Tax receipts were higher than a year ago, but spending on public services, benefits, and other costs grew faster as prices rose. It's the fiscal equivalent of running faster just to stay in the same place.

The interest the government is paying on its debt rose to £8.8bn, its highest August level since records began in 1997. The Institute for Fiscal Studies (IFS) warned that debt interest spending is "a worryingly large share of overall government spending" and has been pushed up since the last official forecasts from the Office for Budget Responsibility (OBR).

Research economist Nick Ridpath said: "Both higher borrowing costs and higher inflation make life harder for a chancellor who is looking to bring down borrowing and to spend more on government priorities." In other words, the Chancellor wants to save money and spend money at the same time, which is a neat trick if you can pull it off.

Ruth Gregory, deputy chief UK economist at Capital Economics, called it a "dismal backdrop for the autumn Budget, with the government once again borrowing more than expected." She said the figures raise the likelihood of many of Prime Minister Andy Burnham's policy ambitions being "reined in or delayed to avoid big tax hikes and/or a backlash in the markets." Gregory also warned that, with the economy weakening, the government is likely to continue borrowing more than expected. So, more of the same, but worse.

Emma Reynolds, chief secretary to the Treasury, said the UK has "huge potential" for economic growth, but only with "fiscal discipline" from the government. "At a time when debt interest costs billions of pounds that could otherwise be spent on improving lives, we must always know where the money is coming from to pay for public services," she said. She added that the government is committed to its fiscal rules "with a buffer against uncertainty." The buffer, presumably, being hope.

Martin Beck, chief economist at WPI Strategy, said it was important not to "overinterpret a single month given the volatility in the numbers," but added there were some "concerning elements." He noted that a quarter of government debt is linked to inflation, and the cost of paying that interest would likely rise over the coming months. While the figures were an "unwelcome setback," he said the government tends to look at the OBR's medium-term fiscal forecast - what it expects for the public finances three years into the future. "But even there, the chancellor's got problems," he said. "The cost of that interest has gone up. That's going to feed through into more borrowing." He added that the government is also under pressure to spend more on defence and cost-of-living support to households.

So, to recap: borrowing is up, debt interest is at a record high for August, inflation is at a five-month high, and the Chancellor has a Budget on 28 October. Good luck with that.