UK borrowing jumps as debt tops £3 trillion

UK public sector net borrowing rose to £24.5 billion in September 2026, as the government spent significantly more than it raised in taxes. Official data show this monthly figure exceeded earlier projections and marked a key deterioration in the public finances ahead of the forthcoming Budget.

Over the first half of the financial year, from April to September, total public sector net borrowing reached £97.8 billion. This year‑to‑date shortfall is about £6.0 billion higher than the level envisaged in the Office for Budget Responsibility’s March forecast, signalling less fiscal room than previously expected.

Provisional estimates indicate that UK public sector net debt exceeded £3 trillion at the end of September 2026, crossing a symbolic threshold for the first time. The increase reflects the cumulative impact of sustained borrowing, including the higher‑than‑expected deficit recorded in September.

Despite the record nominal level, debt as a share of the economy edged down. Public sector net debt stood at about 94% of GDP in September, roughly 0.7 percentage points lower than a year earlier, suggesting that economic growth has slightly outpaced the rise in debt over the past 12 months.

The cost of servicing the national debt added significantly to the borrowing figures. The government paid £10.9 billion in debt interest in September 2026, the highest amount ever recorded for that month. This sizeable interest bill was one of the main contributors to the wider‑than‑expected deficit.

Broader price pressures continue to weigh on the public finances. Consumer price inflation reached 3.5% in the 12 months to September 2026, increasing pressure on both the government’s budget and monetary policymakers, with financial markets anticipating further action from the Bank of England.

Chancellor John Healey has linked some of the recent price increases to conflicts in the Middle East and Europe, saying these developments are hitting Britain. He highlighted the impact of these external shocks on domestic costs and, in turn, on the public finances.

Looking ahead to his Budget next week, Healey has said he intends to maintain fiscal discipline while giving households and businesses some breathing space. The latest borrowing and debt figures frame the challenge of balancing support measures with the need to manage a debt burden now estimated at more than £3 trillion.