Yet yesterday, UK government announced that public sector net borrowing hit £17. This level represents a reduction of £1.8 billion since last October’s allocation. Despite the drop, October still ranks as one of the four highest borrowing totals ever recorded since we started keeping monthly records back in 1993. That’s nothing short of remarkable! The numbers are an indication of the continued worry over the country’s economic health and the health of the federal government’s ability to make its borrowing deadlines.
This October 2024 borrowing jumped up £19.3 billion. At the same time, borrowing for the seven months up until October 2023 is running at £116.8 billion. These numbers underscore the fact that borrowing is through the roof. By March 2025, the outturn for the most recent complete fiscal year will be £149.7 billion. The UK government is now borrowing at levels, per year, equal to the entire gross domestic product (GDP) of the country. This growing gap between needs and available revenue illustrates the massive fiscal hurdle that policymakers need to jump.
Interest payments on government debt are a major burden. As of October 2025, these payments were £8.4 billion, adding even more pressure to public finances. Currently, UK government debt is over £2.6 trillion, a bold contrast to past borrowing norms. Today’s borrowing rates are more than twice what we’ve been used to since the 1980s until the great financial crisis in 2008.
The subsequent surge in U.S. borrowing has alarmed both inside and outside economists. They express concern that the government will be unable to meet its fiscal goals, particularly given the long-term interest rate increases forecast for January. These economic realities will make it all the more difficult to balance public finances and lay the foundation for future, inclusive economic prosperity.
UK government bonds, or “gilts,” are considered among the safest possible investments. Other financial institutions, including pension and investment funds, banks, and insurance companies frequently buy them. This perception of safety has historically facilitated government borrowing. Rising interest rates could affect demand for these financial instruments in the future.
Chancellor Rachel Reeves has made a change to the definition of debt the government will use in its fiscal targets to include. This strategic change aims to allow for increased investment funding, signaling a potential shift in how the government approaches its public sector net borrowing strategy moving forward.
The public sector net borrowing data excludes public sector banks. This is best illustrated in our bar chart that exemplifies the trends from October 2020 through 2025. The chart indicates a steady rise in borrowing throughout this period, highlighting the challenges faced by the UK economy in balancing fiscal responsibility with necessary investment for growth.
Policymakers are sorely testing uncharted economic waters. The repercussions of extreme government borrowing will reverberate through almost every aspect of our economy. The UK government will need to demonstrate iron control of public finances in order to establish the confidence of investors. This focus on the long term is crucial to achieving lasting economic prosperity.