FX.co ★ UK Public Borrowing Higher Than Expected

In August 2025, the United Kingdom experienced a significant increase in public sector net borrowing, excluding public sector banks, which reached £18.0 billion. This is a rise from £14.4 billion in the same month of the previous year and surpassed market forecasts of £12.8 billion. This figure represents the highest level of borrowing for August since 2020. The surge in public sector expenditure, amounting to an additional £8.4 billion, was primarily due to increased costs associated with public services, benefits, and debt interest. Conversely, total receipts increased by £4.8 billion, indicative of stronger revenues from central government taxes and National Insurance contributions. For the financial year up to August, borrowing accumulated to £83.8 billion, a jump of £16.2 billion compared to the same timeframe in 2024 and the second-highest total for the period of April to August since the inception of monthly records in 1993, trailing only 2020. This borrowing amount also exceeded the Office for Budget Responsibility's (OBR) March forecast by £11.4 billion, which was anticipated at £72.4 billion. By the end of August, public sector net debt, excluding public sector banks, was recorded at 96.4% of GDP.