UK borrowing overshoots ahead of Budget

UK public sector net borrowing was £18.3 billion in August 2026, outstripping expectations for the month. The figure was £2.9 billion, or 19%, higher than in August 2025, signalling a notable year-on-year deterioration in the monthly deficit. It also exceeded the Office for Budget Responsibility’s forecast for August by £3.5 billion, highlighting a widening gap between planned and actual borrowing.

The stronger-than-expected borrowing reflects pressures within central government finances. Official statisticians indicated that borrowing so far this financial year is higher than forecast largely because central government has taken on more debt than anticipated. This divergence from the OBR’s planned path is now evident both in the latest monthly reading and in the year-to-date totals.

From the start of the financial year to August 2026, the UK has borrowed £77.3 billion. This cumulative figure stands £8.1 billion above the OBR’s March 2026 forecast profile for the same period. The overshoot suggests that, only partway through the financial year, the government is already running a higher deficit than envisioned in its official fiscal plans.

The gap between the outturn and the forecast underlines the challenge of keeping borrowing on the trajectory assumed earlier in the year. With borrowing already ahead of schedule against the OBR’s profile, any further monthly overshoots would add to the pressure on the overall deficit and the medium-term fiscal outlook.

Debt servicing costs made a significant contribution to August’s borrowing figure. Central government debt interest payments reached £8.8 billion in August 2026, the highest amount recorded for that month. The record August interest bill illustrates how higher debt levels and interest costs are weighing on the public finances.

Alongside these interest payments, current spending excluding interest was also higher than a year earlier, adding to overall borrowing. Together, these elements show that both the cost of existing debt and day-to-day spending are playing a role in pushing borrowing above forecast levels.

These borrowing figures arrive shortly before the government’s autumn Budget, scheduled for Wednesday 28 October 2026. At that event, the Office for Budget Responsibility will publish updated fiscal forecasts alongside the Budget statement. The latest data on borrowing and debt interest will form an important part of the context for those new projections.

With borrowing in both August and the financial year to date above the OBR’s previous profile, the forthcoming forecasts will need to incorporate a weaker starting position for the public finances. The new projections will indicate how this overshoot is expected to shape deficits, debt and the broader fiscal path over the coming years.