The latest public‑finances figures released on Thursday show the United Kingdom borrowed £18.3 billion in August. That is £2.9 billion more than in August 2025, £3.5 billion above the Office for Budget Responsibility’s (OBR) forecast and £2.7 billion higher than the City’s estimate of £15.6 billion.
The surplus borrowing adds to a fiscal shortfall that has already pushed total borrowing for the current financial year £8.1 billion beyond the OBR’s projection. The higher deficit narrows the Chancellor’s room to maneuver ahead of the budget scheduled for next month, a concern amplified by recent volatility in the gilt market.
Emeritus professor Joe Nellis, head of economic research at advisory firm MHA, described the data as “another reminder of the fiscal straightjacket facing the Government.” He noted that the widening gap stems mainly from spending pressures, including higher public‑sector pay, state benefits and pensions, as inflation recently edged to 3.1%.
Public‑sector net debt now sits just below £3 trillion, representing roughly 94% of GDP – the highest ratio since the early 1960s. The cost of servicing this debt remains exceptionally high, further constraining fiscal flexibility.
The day’s agenda includes a £2032 gilt auction by the UK Treasury at 10 a.m. BST, the CBI industrial trends report at 11 a.m., and the Eurozone consumer confidence release at 3 p.m.
