FX.co ★ UK Public Borrowing Lower Than Expected

In December 2025, the UK witnessed a decrease in public sector net borrowing (excluding public sector banks), which dropped to £11.6 billion from £18.7 billion in December of the previous year. This figure was also below the anticipated £14.0 billion. The rise in total public sector receipts by £8.2 billion year-over-year was primarily fueled by nearly 10% growth in central government tax and National Insurance contributions—the highest level ever recorded for a December. Conversely, public sector expenditure increased by £1.1 billion compared to the previous year, driven by higher outlays on public services, social benefits, and debt interest, although this was somewhat offset by reduced payments to international entities. Over the financial year leading up to December, total borrowing reached £140.4 billion, a slight decrease of £0.3 billion (0.2%) from the same period in 2024, but it still ranked as the third-highest borrowing from April to December on record. The public sector net debt, excluding public sector banks, was around 95.5% of GDP, staying near historically high levels.