UK borrowing reached £24.5 billion in September 2026, exceeding the official forecast by £1.9 billion, while public sector net debt provisionally passed £3 trillion for the first time. The Office for National Statistics figures, released on October 21, showed spending rising faster than income ahead of the October 28 Budget.
Key Takeaways
- September borrowing rose £1.8 billion from a year earlier, with debt interest reaching £10.9 billion.
- April–September borrowing was lower than a year earlier but £6.0 billion above the official forecast.
- Public sector net debt exceeded £3 trillion, although its share of GDP fell from a year earlier.
Table of Contents
- UK borrowing rises as spending outpaces receipts
- Debt milestone masks a lower debt-to-GDP ratio
- First-half improvement still trails the fiscal forecast
- Conclusion
UK borrowing rises as spending outpaces receipts
The ONS's September 2026 public finances bulletin showed monthly borrowing increased 7.7% from September 2025. It was the second-highest September total since monthly records began, behind September 2020, without adjusting for inflation.
Central government receipts rose 5.2% to £90.1 billion, supported by higher tax income. Total expenditure increased faster, rising 5.6% to £111.3 billion, with public services, benefits and interest costs all higher than a year earlier.
Debt interest payable reached £10.9 billion, £1.6 billion more than a year earlier and £2.0 billion above the Office for Budget Responsibility forecast. That was the highest September figure since monthly records began in 1997, before adjusting for inflation.
Of that interest bill, £4.0 billion reflected the inflation-linked increase in the principal value of index-linked gilts. This uplift is recorded as it accrues, even though it is paid to bondholders when the securities mature.
| Item | Details |
|---|---|
| Day-to-day public sector deficit, April–September 2026 | £64.0 billion; £5.7 billion lower than a year earlier but £2.4 billion above forecast. |
| Public sector net financial liabilities, end-September | Provisionally £2,643.4 billion, equivalent to 82.7% of GDP. |
| Central government net cash requirement, September | £16.9 billion, excluding UK Asset Resolution and Network Rail; £7.3 billion below forecast. |
Debt milestone masks a lower debt-to-GDP ratio
Public sector net debt was provisionally estimated at £3,005.0 billion at the end of September, up £91.7 billion over the year. The ONS cautioned that the estimate could change as more information becomes available.
Despite the increase in pounds, debt was equivalent to 94.0% of gross domestic product, down 0.7 percentage points from a year earlier. The cash milestone and the ratio therefore tell different stories: the amount owed increased, while its size relative to the economy declined.
The debt ratio nevertheless remained at levels last seen in the early 1960s. Net debt measures what the public sector owes to the UK private sector and overseas, after subtracting liquid assets.
First-half improvement still trails the fiscal forecast
Borrowing across April–September, the first half of the 2026/27 financial year, totaled £97.8 billion. That was £4.4 billion, or 4.3%, below the same period a year earlier, but £6.0 billion above the OBR forecast.
The distinction matters for the Budget: an improvement against last year does not mean borrowing is following the path assumed in the official fiscal projections. The comparison uses the OBR's March 2026 forecast and its subsequently published monthly profiles.
The government has confirmed the Budget for October 28, 2026. The OBR will publish updated fiscal forecasts alongside it, providing the next official assessment of the borrowing outlook.
Conclusion
The figures show lower first-half borrowing than a year earlier, but a larger deficit than the official forecast allowed for. The October 28 Budget and accompanying OBR projections are the next confirmed tests of the government's fiscal outlook.
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