UK Public Borrowing Slightly Below Forecasts

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.

Public sector net borrowing in the UK, excluding public sector banks, recorded a £30.4 billion surplus in January 2026, more than doubling from £14.5 billion a year earlier and exceeding expectations of £23.8 billion. This marked the largest budget surplus since records began in 1993, as total public sector receipts rose by £16.8 billion year-on-year, supported by strong capital gains tax inflows after companies and individuals brought forward asset sales ahead of planned tax increases. January receipts are typically elevated due to self-assessed payments, with combined income and capital gains tax revenues reaching a record high. Meanwhile, public sector expenditure increased by £0.9 billion, as higher public service and benefit costs were largely offset by lower interest payments on government debt. For the financial year to January, borrowing totaled £112.1 billion, below the OBR’s £120.4 billion forecast, though still the fifth-highest April–January borrowing on record.