FX.co ★ UK Public Sector Borrowing Slightly Higher than Expected

UK public sector net borrowing (excluding public sector banks) stood at £24.5 billion in September 2026, up from £22.8 billion a year earlier and above market expectations of £23.9 billion. This was the second-highest September borrowing figure on record (in nominal terms), surpassed only by 2020, as expenditure grew faster than receipts.

Total public sector expenditure rose by £6.7 billion to £123.8 billion. Central government spending increased by £5.9 billion to £111.3 billion, reflecting higher outlays on public services, debt interest, welfare benefits, and other costs.

Total receipts increased by £4.9 billion to £99.3 billion, with central government receipts up £4.5 billion to £90.1 billion, supported by stronger tax revenues.

Over the financial year to September, borrowing reached £97.8 billion, £4.4 billion (4.3%) lower than in the same period a year earlier, but £6.0 billion above the forecast of the Office for Budget Responsibility (OBR). Public sector net debt was 94% of GDP in September, remaining close to levels last seen in the early 1960s.