UK borrowing exceeds forecasts in August ahead of October budget
Britain’s public sector borrowing reached £18.3 billion in August, exceeding forecasts and widening the financial year deficit above official projections.
London, United Kingdom. Britain’s public sector borrowing exceeded expectations in August, increasing pressure on finance minister John Healey ahead of his first budget on October 28. The deficit for the financial year to date is also above the Office for Budget Responsibility’s forecast.
August borrowing data
The Office for National Statistics reported public sector net borrowing of £18.3 billion ($24.5 billion) in August.
The figure was higher than all forecasts in a Reuters poll of economists, which had projected a deficit of £15.5 billion.
Gilt futures fell 20 ticks after the data was released before recovering, while cash-market yields rose modestly at the open.
Financial year deficit
The ONS revised borrowing higher for each of the previous four months of the 2026/27 financial year, bringing cumulative borrowing between April and August to £77.3 billion.
Although the total was £2.2 billion lower than at the same point in the 2025/26 financial year, it was £8.1 billion higher than the OBR had forecast for this stage of the year. The OBR’s projections underpin Healey’s tax and spending plans.
Borrowing for the previous 2025/26 financial year was revised up by £4.5 billion to £134.3 billion.
Budget outlook
Investors are monitoring how Healey will meet his fiscal-rule commitments without increasing the main taxes while pledging to restrain spending. Tuesday’s figures showed spending was being pushed higher by inflation.
“Medium-term borrowing prospects look far more challenging than in March,” said Matt Swannell, chief economic adviser to the ITEM Club consultancy.
This news item was generated automatically by Cyprus Inform from publicly available materials. Report an error →