UK Public Surplus Widens in January

UK public sector net borrowing (excluding public sector banks) widened to £24.3 billion in April 2026 from £19.5 billion a year earlier, above market expectations of £20.9 billion. It was the second-highest April borrowing on record, underlining pressure on the public finances. The reading contrasts with March forecasts that borrowing would fall to 3.6% of GDP in the 2026/27 tax year, its lowest level since before the COVID-19 era. However, the war involving Iran has increased the risk of an economic slowdown, threatening tax revenues while adding pressure on Chancellor Rachel Reeves to support households and businesses facing higher energy costs. Public sector spending rose by £7.6 billion, driven by higher welfare costs, increased investment, public service spending, and record April debt interest payments. Meanwhile, public sector receipts increased by £2.7 billion. Public sector net debt stood at 94.2% of GDP at the end of April, up 0.5 percentage points from a year earlier.

UK public sector net borrowing (excluding public sector banks) narrowed to £12.6 billion in March 2026 from £14.0 billion in the same month last year, but remained above expectations of £10.4 billion. In the financial year ending March 2026, public sector net borrowing stood at £132.0 billion, £19.8 billion lower than in FYE March 2025 and £0.7 billion below the £132.7 billion forecast by the OBR, marking the lowest level in three years. Total public sector receipts increased to £1,230.8 billion, rising by £92.1 billion from a year earlier, supported by a £87.7 billion (9.1%) jump in tax revenues and National Insurance contributions. Meanwhile, public sector spending rose to £1,362.8 billion, up £72.2 billion, driven by higher costs for public services, benefits, and debt interest. Public sector net debt stood at 93.8% of GDP at the end of March, up 0.6 percentage points from the previous year.

UK public sector net borrowing (excluding public sector banks) rose to £14.3 billion in February 2026 from £12.1 billion in the same month last year, exceeding expectations of £8.5 billion. This marked the second-highest February borrowing since records began in 1993, behind 2021. Public sector expenditure increased by £10.8 billion year-on-year, driven by higher costs for public services, benefits, debt interest, and investment. Central government debt interest costs reached a record for the month of February. Meanwhile, total public sector receipts rose by £8.6 billion, partly reflecting late payments of self-assessed taxes typically due on 31 January but recorded in February. For the financial year to February, borrowing stood at £125.9 billion, £11.9 billion or 8.7% lower than in the same 11-month period a year earlier. However, it remained the fourth-highest April-to-February borrowing on record and slightly below the £127.8 billion forecast by the OBR.