UK Public Borrowing Surpasses Expectations

UK public sector net borrowing (excluding public sector banks) was £18.3 billion in August 2026, higher than the £15.4 billion recorded in the same month last year and market expectations of £15.7 billion. This marked the second-highest August on record (not adjusted for inflation), behind 2020, and was £3.5 billion above the OBR forecast. Total public sector spending rose by £6.7 billion year-on-year to £117.2 billion, with central government spending increasing £4.9 billion to £103.1 billion, driven by higher spending on goods and services and net social benefits. Meanwhile, total receipts rose by £3.7 billion to £99.0 billion, with central government receipts rising £3.3 billion to £89.8 billion, led by higher income-related taxes. Borrowing in the financial year to August stood at £77.3 billion, £2.2 billion, or 2.7%, below a year earlier but £8.1 billion above the OBR forecast. Public sector net debt was 93.8% of GDP at end-August, remaining at levels last seen in the early 1960s.

UK public sector net borrowing (excluding public sector banks) was £1.8 billion in July 2026, higher than the £1.1 billion recorded in the same month a year earlier and compared with market expectations for no change. Public sector spending increased by £5.6 billion year-on-year to £115.3 billion, as higher inflation pushed up the cost of welfare, debt interest, wages and government procurement. Receipts rose by £4.8 billion to £113.5 billion, mainly due to rising self-assessment tax receipts, which reached £17.1 billion, the highest for any July on record. Borrowing in the financial year to July 2026 totaled £56.7 billion, £6.0 billion, or 9.6%, lower than in the same period a year earlier but £2.3 billion above the OBR’s forecast. This marked the 12th-lowest April-to-July borrowing total since comparable monthly records began in 1993. Public sector net debt stood at 94.1% of GDP, 0.8 percentage points lower than a year earlier but still at levels last seen in the early 1960s.

UK public sector net borrowing (excluding public sector banks) recorded £16.0 billion in June 2026, a third lower than £23.9 billion in the same month last year and below market expectations of £19.8 billion. In the financial year through June 2026, public sector net borrowing stood at £57.6 billion, £3.7 billion lower than in the same period last year but £2.7 billion above the OBR’s March forecast, marking the tenth-highest April-to-June borrowing since comparable records began in 1993. Central government receipts rose to £95.0 billion, up £5.2 billion from a year earlier, supported by strong growth in income-related taxes and Value Added Tax receipts. Meanwhile, central government expenditure eased to £111.4 billion from £112.9 billion, largely reflecting a £5.3 billion decline in debt interest payments to £11.8 billion, although they remained the fourth-highest June on record. Public debt remained close to 95% of GDP, near its highest level since the early 1960s.