In October 2023, the UK government announced a borrowing total of £17.4 billion. This is £1.8 billion less than the same point last year. That point has already been stated loudly, it continues to pack a punch when seen through the context of past years. The total is the third-highest for any October since official monthly records started in 1993. The latest borrowing data makes clear that the UK finds itself in an increasingly dire fiscal situation. The nation is still grappling with the economic aftermath from the double whammy of the financial crash and the COVID-19 pandemic.
In October, we saw public sector net borrowing of £16.4 billion. This picture underscores what has been a surprising trend the last few years. Consistent high levels of government borrowing. In the last full fiscal year before March 2025, the UK government borrowed an eye-watering £149.7 billion. This unprecedented borrowing speaks to the deep ordeals experienced in that era. This year’s borrowing level has jumped incredibly high. It’s now more than twice what it was from the 1980s until the great recession of 2008.
In the seven months up to October, total government borrowing was £116.8 billion. This massive number further highlights the growing dependence on borrowed money to pay for spending and cover budget shortfalls. Meanwhile, the UK government has built up about £2.6 trillion in total debt. That figure nearly matches the country’s gross domestic product (GDP), the value of everything produced in a year.
Even Interest payments on government debt had a major spike and crash. In October 2024, those payments rocketed to £19.3 billion. As of October 2025, they had pulled back to £17.4 billion, as opposed to the peak. These trends further illustrate the reality that public finances are under constant pressure. They accentuate the effects that high debt levels will have on future fiscal policy.
The UK’s pattern of borrowing is usually very seasonal in its run up to the fiscal year end in March. For example, borrowing is always lower in January as various people pay a big chunk of their annual tax burden upfront. This seasonal fluctuation can have a significant impact on cash flow and in turn, on the short-term borrowing strategies used by the government.
UK and international financial institutions have, historically, been the main buyers of gilts – the UK’s government bonds. These institutions are, formally or informally, pension funds, investment funds, banks and/or insurance companies. For all investors, these instruments are perceived to be the safest and most reliable. They do so with very little repayment risk, creating an alluring combination for investors seeking stability.
Then that double-whammy financial crisis smacked hard, not long after a global pandemic shook the economic landscape. Cumulatively, these three events have abruptly and drastically raised the UK’s debt levels. The government is working hard to address economic challenges. Sustained borrowing and increasing debt will remain serious issues for policymakers and taxpayers for the foreseeable future.
The UK needs to live within its means. This need is especially apparent as the nation seeks to reconcile fiscal prudence with a desire to reboot the nation’s economy. Stakeholders from all oversight perspectives are watching these changes to see how they might affect future public policy and delivery of services by government.