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UK borrowing jumps to £18bn in AugustNewsflash: Britain’s government borrowing soared in August, as spending rose faster than tax receipts, adding to the challenges facing Rachel Reeves as she draws up the autumn budget.Public sector net borrowing excluding public sector banks jumped to £18bn in August 2025. This was £3.5bn more than in August 2024 and the highest August borrowing for five years.It’s also £5.5bn more than the £12.5bn which the Office for Budget Responsibility (OBR) had predicted the UK would borrow in August.ONS chief economist Grant Fitzner said:
“Last month’s borrowing was the highest August total since the pandemic.
Although overall tax and National Insurance receipts were noticeably up on last year, these increases were outstripped by higher spending on public services, benefits and debt interest. Total borrowing for the financial year to date was also the highest since 2020.
ShareUpdated at 07.28 BSTKey eventsShow key events onlyPlease turn on JavaScript to use this featureInterest bill on government debt rises againOnce again, Britain spend billions of pounds servicing its growing national debt (and thus adding to it!).The interest bill on central government debt rose to £8.4bn in August, £1.9bn more than in August 2024, and £900m more than in July.This increase was driven by higher inflation, which added to the cost of index-linked government bonds.UK government interest payments Photograph: ONSSo far this financial year, the interest payable on central government debt has increased by £10.6bn to £49.9bn, largely because the interest payable on index-linked gilts rises and falls with the Retail Prices Index (RPI) of inflation.ShareBorrowing so far this year is over forecastWorryingly for Rachel Reeves, government borrowing so far this financial year is running ahead of the Office for Budget Responsibility’s forecasts.From April to August, borrowing now totals £83.8bn, £16.2bn more than in the same five-month period of 2024.That’s the second-highest April to August borrowing since monthly records began in 1993, beaten only by 2020 when Covid-19 drove up spending and hammered tax receipts.It’s also £11.4bn more than the £72.4bn forecast by the Office for Budget Responsibility (OBR) in March.That indicates that the chancellor could need to take measures to address rising borrowing, to stick within her fiscal rules.ShareMHA: “UK public sector borrowing jumps again deepening the Chancellor’s worries”This morning’s jump in UK public sector borrowing will “deepening the Chancellor’s worries, warns Professor Joe Nellis, economic adviser at MHA, the accountancy and advisory firm.Professor Nellis explains:
UK net public sector borrowing rose significantly in August to £17.96bn, piling extra pressure on the Chancellor as preparations intensify for the Autumn Budget.
The overshoot was driven by persistently high debt interest costs on inflation-linked gilts — 30-year gilts reached their highest in almost 30 years in August. The debt-inflation costs are now projected at over £110 billion in 2025-26. Higher borrowing is also the result of rising welfare spending and higher public sector pay settlements.
As the economy continues to falter, without any consistent and sustained growth, increased government borrowing makes the Chancellor’s fiscal headroom even slimmer ahead of the Budget on 26th November. This simply cannot go on. A government cannot continue to spend beyond its means while espousing belief in ‘fiscal stability,’ without evoking the wrath of the financial markets. The Chancellor has some very difficult, but very important, decisions to make at the Budget if fiscal stability is to be secured.
ShareUK borrowing jumps to £18bn in AugustNewsflash: Britain’s government borrowing soared in August, as spending rose faster than tax receipts, adding to the challenges facing Rachel Reeves as she draws up the autumn budget.Public sector net borrowing excluding public sector banks jumped to £18bn in August 2025. This was £3.5bn more than in August 2024 and the highest August borrowing for five years.It’s also £5.5bn more than the £12.5bn which the Office for Budget Responsibility (OBR) had predicted the UK would borrow in August.ONS chief economist Grant Fitzner said:
“Last month’s borrowing was the highest August total since the pandemic.
Although overall tax and National Insurance receipts were noticeably up on last year, these increases were outstripped by higher spending on public services, benefits and debt interest. Total borrowing for the financial year to date was also the highest since 2020.
ShareUpdated at 07.28 BSTIntroduction: Consumer confidence has fallen backGood morning, and welcome to our rolling coverage of business, the financial markets and the economy.UK consumer confidence has weakened, new data today shows, as people grow gloomier about the their personal financial situation and the state of the economy.With a likely tax-raising budget looming in two months time, GfK’s consumer confidence Index decreased by two points to -19 in September, reversing a rise recorded in August.All five measures of consumer confidence fell, including how confident people felt about making a major purchase.Neil Bellamy, consumer insights director at GfK, warned there is an “autumnal chill” in this month’s report, and explains:
The August 7th decrease in interest rates does not appear to have provided any obvious boost to the financial mood of consumers or drawn attention away from day-to-day cost issues. Both personal finance measures – past and future – are lower, while our major purchases measure has dropped three points to -16.
Even more striking is an eight-point fall in saving intentions. Looking at the economy, sentiment is sliding sharply: in June 2024 our forward-looking measure stood at -11, but just 15 months later it has slumped to -32.
Perceptions of the past year remain weak too, down three from last month to -45. With tax rises expected in the November budget, the risk is that confidence inevitably falls, just like the autumn leaves.”
Yesterday, retailer Next warned that the economic outlook was weakening, giving the company “another reason to be cautious”.The agendaShareUpdated at 07.14 BST
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