UK public borrowing is now forecast to fall to 4.2% of GDP this year, 3.4% next year and 2.9% in 2028–29, according to the latest revised projections from the Office for Budget Responsibility (OBR), presented by Chancellor John Healey in the Budget. These figures are higher than the OBR’s March forecasts, which put borrowing at 3.6% of GDP this year, 2.9% in 2027–28 and 2.5% in 2028–29. The upward revision reflects increased global uncertainty, with conflicts in the Middle East and Ukraine driving higher energy prices, inflation and borrowing costs worldwide.
The OBR also estimates that the government’s headroom against its fiscal stability rule will be £15 billion in 2029–30, rising to £22 billion in 2030–31. Public sector net debt is projected to reach 83.2% of GDP this year and 83.8% in both 2027–28 and 2028–29, before gradually declining to 81.7% by 2031–32.
