Public sector net borrowing rose by £557m in July according to the Office for National Statistics.
The shock figure shows Britain's public sector finances were in deficit following a shortfall in corporation tax.
It compares to a £2.8bn surplus in the same month last year and defies city expectations of a £2.5bn surplus.
The official figures will heap further pressure on Chancellor George Osborne as his deficit reduction plans are thrown into question.
Sky's economics editor Ed Conway said: "These figures back up that Britain is back in a double dip recession.
"It puts an increasing amount of pressure on the Chancellor to do something to stimulate the economy."
The news comes as net borrowing for April to June was revised up by £1.4bn.
It brings Britain's borrowing so far this year up to £44.9bn, which is £9.3bn higher than last year.
