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Macro EconomyMediumUpdated×3•Originally published 28 October 2026•Updated 28 October 2026•
4 min read

UK Borrowing Reaches £24.5 Billion in September, Exceeding Forecasts by £1.9 Billion

Key Facts

1Public sector net borrowing was £24.5 billion in September, up £1.8 billion, or 7.7%, year on year, and exceeding forecasts by £1.9 billion.
2Debt interest payable reached £10.9 billion, up £1.6 billion, or 16.6%, year on year, and above forecasts by £2 billion.
3Cumulative borrowing through September was £97.8 billion, down £4.4 billion, or 4.3%, year on year, but exceeding forecasts by £6 billion.
4Public sector net debt reached £3,005.0 billion, equivalent to 94.0% of gross domestic product.
5Healey put projected fiscal headroom at £15 billion in 2029/30 and £22 billion in 2030/31, compared with the March estimate of £24 billion.

UK public sector net borrowing was £24.5 billion in September 2026, up £1.8 billion, or 7.7%, year on year, according to the Office for National Statistics. The figure was £1.9 billion higher than the Office for Budget Responsibility’s forecast. September borrowing was the second-highest on record for that month, after September 2020, without adjusting for inflation. The ONS attributed the annual increase to spending growing faster than receipts. The monthly reading adds further pressure to the public finances as the government entered budget week with borrowing figures above the expected path.

Central government debt interest payable was £10.9 billion in September, up £1.6 billion, or 16.6%, compared with September 2025. Interest also exceeded the Office for Budget Responsibility’s forecast by £2 billion. The amount was the highest September reading since monthly records began in 1997, without adjusting for inflation. Of the total interest, £4 billion reflected capital uplift on index-linked gilts. The ONS said this effect was largely linked to a 0.6% rise in the Retail Prices Index between June and July 2026.

Borrowing for the financial year to September was £97.8 billion, down £4.4 billion, or 4.3%, from the same period a year earlier. But it exceeded the Office for Budget Responsibility’s forecast by £6 billion, keeping the cumulative total above estimates despite the annual improvement. The public sector current budget deficit was £15.8 billion in September and reached £64 billion since the start of the financial year. The cumulative deficit was £5.7 billion, or 8.2%, lower than a year earlier, but exceeded the office’s forecast by £2.4 billion. Meanwhile, central government net cash requirement reached £16.9 billion in September, up £1 billion, or 6.5%, year on year, but came in £7.3 billion below forecasts.

Central government current receipts rose 5.2% to £90.1 billion in September, with income-related taxes increasing 7.4% to £23.2 billion. Even so, spending on goods and services grew 3.5% in the six months to September compared with the corresponding period. These movements show a divergence between receipts and spending, at a time when the ONS said spending growth outpaced receipts growth in overall borrowing. The Office for Budget Responsibility had reported that borrowing in the first five months of the financial year was £77.3 billion, £2.2 billion lower than in the same period a year earlier. But it was £8.1 billion above the path consistent with the March forecast, driven by central government spending that was £7.4 billion higher than expected through August.

Public sector net debt reached £3,005.0 billion at the end of September, £91.7 billion higher than a year earlier, equivalent to 94.0% of gross domestic product. Despite the increase in the nominal value of debt, its share of GDP was 0.7 percentage points lower year on year. Debt first exceeded £2 trillion in June 2020, after topping £1 trillion in February 2010. In the budget presented by John Healey on 28 October, he said the projected fiscal headroom was £15 billion in the 2029/30 financial year, rising to £22 billion in 2030/31. That compares with an estimate of £24 billion in March, reflecting a reduction in projected headroom in the first year of the new forecast.

The budget included an increase in the surcharge on banks’ profits from 3% to 6% for 15 months, ending on 31 March 2028, to fund electricity-bill support. The government also announced a £100 household energy payment in 2027 for up to 20 million households in England in council tax bands A to D, with equivalent support funded for the rest of the UK. The government asked Ofgem to abolish fixed charges on household gas and move them into the unit rate, targeting implementation by the end of 2027 or as soon as possible afterwards. This step is separate from the planned removal of a levy on gas bills to fund hydrogen projects. The ONS is due to publish its next public finance data on 20 November 2026.