UK Borrowing Overshoots Forecast, Challenging Healey’s First Budget
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UK Government Borrowing Exceeds Expectations, Pressuring Healey’s Budget Plans
Government Borrowing Figures and Economic Impact
By Andy Bruce
August Borrowing Surpasses Forecasts
MANCHESTER, England, Sept 22 (Reuters) – Britain’s government borrowed more than expected in August, pushing the deficit for the financial year so far further above official forecasts and adding to a tough backdrop for finance minister John Healey ahead of his first budget.
The Office for National Statistics (ONS) on Tuesday reported public sector net borrowing of £18.3 billion ($24.5 billion) in August.
Economist Predictions vs. Actual Borrowing
The figure was above all forecasts in a Reuters poll of economists which had pointed to a £15.5 billion deficit.
Revisions and Cumulative Deficit
The ONS also revised up borrowing for each of the previous four months of the 2026/27 financial year, with the April-August cumulative deficit standing at £77.3 billion pounds.
Comparison to Previous Year and OBR Forecasts
While that was £2.2 billion less than at the same point in 2025/26, it was £8.1 billion higher than the Office for Budget Responsibility (OBR) — whose forecasts underpin Healey’s tax and spending plans — had expected at this point in the year.
Factors Influencing Borrowing Levels
An ONS statistician said that while tax receipts had looked strong, this had been offset by rising government spending on goods and services and welfare benefits linked to inflation.
Current Budget Deficit and Outlook
The current budget deficit — or the difference between day-to-day spending and tax revenue and which the government must balance in 2029/30 — stood at £51.9 billion in the year to date.
OBR Forecast Comparison
Again, that was higher than the OBR’s forecast for £47.1 billion at this point in the year.
Additional Information
($1 = 0.7474 pounds)
(Reporting by Andy Bruce; Editing by Kate Holton)
