UK Net Debt Tops 3 Trillion Pounds for the First Time as September Borrowing Hits 24.5 Billion
UK public sector net debt rose above 3 trillion pounds for the first time at the end of September, the Office for National Statistics said on 21 October. The provisional estimate is 3,005.0 billion pounds, and the statistics office said it may be revised as more data arrive. Borrowing in September alone came to 24.5 billion pounds.
Measured against the economy, debt moved the other way. Net debt equalled 94.0 percent of GDP, 0.7 percentage points lower than a year earlier. Cash GDP grew faster than the debt did. Even so, the ratio sits at levels last seen in the early 1960s.
Debt Interest Reaches 10.9 Billion Pounds, Up 16.6 Percent
September’s 24.5 billion pounds was 1.8 billion pounds, or 7.7 percent, more than a year earlier. It was the second-highest September on record, behind 2020, before any adjustment for inflation. Spending grew faster than income. Central government receipts reached 90.1 billion pounds. Central government spending reached 111.3 billion pounds. Receipts therefore covered 81.0 percent of central government spending in the month, on our calculation.
Debt interest was the standout. Central government interest payable reached 10.9 billion pounds, up 16.6 percent on the year. That is the highest September since monthly records began in 1997, not adjusted for inflation. It is also only the eighth month in which interest payable has topped 10.0 billion pounds. On our calculation, the interest bill equals 44.5 percent of the month’s total borrowing.
Inflation sits inside that number. Of the 10.9 billion pounds, 4.0 billion pounds was the capital uplift on index-linked gilts, driven mostly by a 0.6 percent rise in the Retail Prices Index between June and July. The uplift is 36.7 percent of the month’s interest, on our calculation. The rest of the interest bill comes to 6.9 billion pounds, also on our calculation. Separately, the statistics office estimates that 1.9 billion pounds of Winter Fuel Payments accrued to September. The liability is recorded that month, although payments go out from November.
UK public sector borrowing, September 2026 against September 2025
| Measure | Sep 2026 (£bn) | Sep 2025 (£bn) | Change (%) |
|---|---|---|---|
| Public sector net borrowing | 24.5 | 22.8 | 7.7 |
| Central government debt interest | 10.9 | 9.4 | 16.6 |
| Public sector current budget deficit | 15.8 | 14.8 | 6.4 |
| Central government current receipts | 90.1 | 85.6 | 5.2 |
| Central government total expenditure | 111.3 | 105.3 | 5.6 |
Source: ONS, Public sector finances, UK: September 2026, Tables 1 to 3. Changes are as published and may differ from the rounded levels shown.
Half-Year Borrowing Falls 4.3 Percent but Runs 6.0 Billion Pounds Above Forecast
Borrowing in the financial year to September reached 97.8 billion pounds. That is 4.4 billion pounds, or 4.3 percent, less than in the same six months of 2025. It equals 3.1 percent of GDP, 0.3 percentage points lower than a year earlier. That is still the 10th highest April to September figure since comparable monthly records began in 1993.
Receipts grew faster than spending. Central government receipts rose 31.6 billion pounds, or 6.0 percent, to 554.3 billion pounds. Spending rose 30.8 billion pounds, or 4.9 percent, to 656.9 billion pounds. On our reading of the release’s receipts table, Corporation Tax grew fastest of the taxes listed, up 14.5 percent to 55.9 billion pounds. Interest still cost more. Half-year interest payable of 60.8 billion pounds exceeds the Corporation Tax take by 4.9 billion pounds, on our calculation. It also equals 62.2 percent of the period’s borrowing, on our calculation.
Against the Office for Budget Responsibility’s March forecast, borrowing ran 6.0 billion pounds higher, an overshoot of 6.5 percent on our calculation. Receipts beat the forecast by 5.8 billion pounds. Corporation Tax led, at 5.3 billion pounds above. Social contributions, largely National Insurance, added 3.3 billion pounds, and Income Tax 2.9 billion pounds. VAT and several other receipts came in below forecast. Spending came in 8.9 billion pounds higher. Debt interest alone was 3.8 billion pounds above forecast, or 42.7 percent of the spending excess on our calculation, and social benefits 2.5 billion pounds.
The day-to-day gap narrowed. The current budget deficit for the half-year was 64.0 billion pounds, 5.7 billion pounds less than a year earlier. It makes up 65.4 percent of total borrowing on our calculation. The other 33.8 billion pounds of borrowing, also on our calculation, falls outside the current budget deficit. Earlier months also improved. The statistics office cut its estimate of borrowing to August by 4.0 billion pounds, to 73.3 billion pounds. Its estimate of tax receipts went up by 3.5 billion pounds.
Financial year to September 2026 against the March forecast
| Measure | Outturn (£bn) | Forecast (£bn) | Difference (£bn) |
|---|---|---|---|
| Central government current receipts | 554.3 | 548.5 | 5.8 |
| Central government total expenditure | 656.9 | 648.0 | 8.9 |
| Public sector net borrowing | 97.8 | 91.8 | 6.0 |
| Public sector current budget deficit | 64.0 | 61.6 | 2.4 |
The forecast is the March 2026 Economic and fiscal outlook with its monthly profiles published in April 2026. Year-to-date comparisons are a steadier guide than single months.
From 1 Trillion Pounds in 2010 to 3 Trillion in 2026
Net debt first passed 1 trillion pounds in February 2010, after the global financial crisis. It passed 2 trillion pounds in June 2020, during the pandemic. On our count, the first step took 124 months and the second 75 months. Over the past year the debt rose 91.7 billion pounds. September alone added 23.8 billion pounds on our calculation, against a revised end-August level of 2,981.2 billion pounds.
The ratio tells a calmer story. At 94.0 percent of GDP, net debt is 1.2 percentage points below the March forecast. The Bank of England’s own balance sheet also matters to the round number: excluding the Bank, net debt stands at 2,897.8 billion pounds, so the Bank accounts for 107.2 billion pounds of the total on our calculation.
The government’s fiscal rule uses a wider measure, net financial liabilities. It stood at 2,643.4 billion pounds. That is 82.7 percent of GDP, 0.7 percentage points higher than a year earlier. The measure is 361.6 billion pounds below net debt on our calculation, because the extra financial assets it counts outweigh the extra liabilities. The targets ask for a current budget surplus and for this liabilities ratio to fall by the financial year ending March 2030. At the end of March 2026 it was initially estimated at 81.4 percent of GDP.
Why it matters: The UK now carries more than 3 trillion pounds of net debt. Cash GDP grew faster than the debt, so the ratio to GDP is lower than a year ago. The pressure point is the interest bill, which equalled 44.5 percent of September’s borrowing on our calculation. Index-linked gilts tie part of that bill to the Retail Prices Index. Half-year borrowing is below last year’s but still above the official forecast.
Outlook: The Budget is set for Wednesday 28 October, and the forecaster will publish an updated set of fiscal forecasts alongside it. The October public finances follow on 20 November. The extra assets and liabilities in the wider measure behind the fiscal rule are next updated on 22 December.
Sources: Office for National Statistics, Office for Budget Responsibility, The Edge.
