The UK’s national debt has ballooned to a whopping £2.9 trillion. This eye-popping number has raised the concern of economists and policymakers alike. In fact, the total amount the federal government has borrowed has more than doubled since the 1980’s. This growth was compounded by the Great Recession of 2008. The double whammy of the financial crash and then the Covid-19 pandemic has deeply wounded public finances. Consequently, debt has soared in record time.
In their last complete financial year, which ended March 2025, the UK government borrowed £152.6 billion. This borrowing is indicative of a broader trend. The longer-term graph below shows that government debt increases during many years where there is a deficit and decreases in years where surpluses happen. Of course, given the unpredictable nature of borrowing levels month-to-month, these are just estimates. Such as last November, when public sector net borrowing was £7.4 billion. The latest estimates suggest borrowing of £13.6 billion in November 2024 and £11.7 billion in November 2025.
Government bonds, or “gilts” as they are called in the UK, are an important pillar for this financial house of cards. Gilts are usually regarded as almost risk-free assets, having zero default risk. Financial institutions, both here in the U.S. and worldwide, are deeply enamored with them. That means institutional investors—we’re talking about pension funds, investment funds, banks, and insurance companies. Perhaps that is why the stability of these bonds is so appealing. In November 2025, UK government debt interest payments were already over £3.4 billion.
Despite the rising national debt, current figures remain relatively low compared to much of the last century when measured against the size of the UK economy. The government has adopted a policy that aligns with previous administrations: Labour has committed to reducing the total amount owed as a proportion of the economy within five years. This pragmatic approach applies the common-sense goal of fiscal responsibility to making the investments needed to keep our economy growing.
Chancellor Rachel Reeves made some historic moves in the October 2024 Budget. She took on conventional wisdom and redefined the metrics we used to measure our government debt. This change was intended to facilitate increased borrowing for investment purposes, highlighting an ongoing strategy to stimulate economic activity despite rising debt levels.
The politics of UK government borrowing is a complex beast, shaped in large part by the UK’s changing economic circumstances and the choices made by right wing politicians. As the nation navigates these challenges, understanding the implications of national debt becomes increasingly important for citizens and stakeholders alike.