Public sector finances, UK: January 2026

• Initial estimates show that the public sector recorded a £30.4 billion surplus in January 2026, £15.9 billion higher than, or double that of January 2025, and £6.3 billion above the Office for Budget Responsibility’s November 2025 forecast; the highest surplus in any month since records began in 1993 (not adjusted for inflation).

• In January, tax receipts are always higher than in other months, because of receipts from self-assessed taxes; combined self-assessed Income and Capital Gains Tax receipts were provisionally estimated at £46.4 billion in January 2026, £10.5 billion more than January 2025.

• Borrowing in the financial year to January 2026 was £112.1 billion; this was £14.6 billion or 11.5% less than in the same 10-month period a year ago, but still the fifth-highest April to January borrowing on record (not adjusted for inflation).

• Borrowing in the financial year to January 2026 was provisionally estimated at 3.7% of gross domestic product (GDP); this was 0.7 percentage points less than in the same 10-month period a year ago.

• The current budget - borrowing to fund day-to-day public sector activities - was in surplus by £40.9 billion in January 2026; this brings the total current budget deficit in the financial year to January 2026 to £55.9 billion, which is £18.0 billion or 24.3% less than in the same 10-month period a year ago.

• Public sector net debt excluding public sector banks - a measure of the amount of money owed to the UK private sector and overseas less any liquid assets held - was provisionally estimated at 92.9% of GDP at the end of January 2026 and remains at levels last seen in the early 1960s.

• Public sector net financial liabilities excluding public sector banks - which considers a wider range of financial assets and liabilities than net debt - were provisionally estimated at 82.4% of GDP at the end of January 2026, 10.5 percentage points less than for public sector net debt.

• Central government net cash requirement (excluding UK Asset Resolution Ltd and Network Rail) - the additional cash needed to be raised from the financial markets to finance activities - was in surplus by £39.8 billion in January 2026; this was a £24.6 billion or 161.4% larger surplus than in January 2025.

Initial estimates show that the public sector recorded a £30.4 billion surplus in January 2026, £15.9 billion higher than in January 2025, and £6.3 billion above the Office for Budget Responsibility’s forecast.

Our Public sector finances borrowing by subsector: Appendix R dataset provides further detail on data presented in Table 1, including transactions related to borrowing by each subsector and their contribution to total public sector borrowing in a matrix table format. The time period presented in the matrix table can be changed using the dropdown box feature.

Central government borrowing

Central government forms the largest part of the public sector and includes government departments such as HM Revenue and Customs, the Department of Health and Social Care, the Department for Work and Pensions, the Department for Education, the Ministry of Defence, and other government agencies.

The relationship between central government’s receipts and expenditure is an important determinant of public sector net borrowing. Of the £30.4 billion public sector surplus in January 2026, central government surplus was £31.2 billion. Each of the other subsectors showed a small surplus except for local government which borrowed £3.3 billion.

Central government current receipts

In January, tax revenue is always higher than in other months because of receipts from self-assessed (SA) taxes. This often leads to a surplus, with income exceeding expenditure, rather than borrowing.

Central government’s current receipts were £133.3 billion in January 2026, which is £16.2 billion or 13.8% more than in January 2025. Of this £16.2 billion increase in income:

• central government tax receipts increased by £13.3 billion to £109.7 billion; this included increases of £12.3 billion in Income Tax receipts (including PAYE and self-assessed Income Tax), £0.7 billion in Corporation Tax receipts, and a £0.1 billion decrease in Value Added Tax (VAT) receipts

• compulsory social contributions increased by £2.9 billion to £17.7 billion, as changes to the rate of National Insurance contributions paid by employers came into effect on 6 April 2025

A detailed breakdown of central government income is presented in our Public sector current receipts: Appendix D dataset.

The forecasts underlying our current tax estimates reflect the expectations published in the Economic and fiscal outlook - November 2025 report from the Office for Budget Responsibility (OBR).

In January 2026, SA Income Tax receipts were provisionally estimated at £29.4 billion, £3.6 billion more than in January 2025, and £1.7 billion more than the £27.7 billion forecast by the OBR in November 2025.

SA Capital Gains Tax receipts were provisionally estimated at £17.0 billion, £7.0 billion more than in January 2025, and £1.1 billion more than the £15.9 billion forecast by the OBR.

Central government current expenditure

Central government spending data for January 2026 are provisional. There is uncertainty around these estimates until more detailed departmental information becomes available over time.

Central government’s current expenditure - spending to fund its day-to-day activities - was provisionally estimated as £86.1 billion in January 2026, which is £0.6 billion, or 0.7%, less than in January 2025. Of this £0.6 billion reduction in spending:

• central government debt interest payable decreased by £5.0 billion to £1.5 billion, with movements in the Retail Prices Index (RPI) adding volatility to the monthly debt interest costs

• current grants paid to the rest of the world decreased by £0.6 billion to £0.5 billion, reflecting both a reduction in payments to the EU and a change in the monthly pattern of ongoing payments

• central government departmental spending on goods and services increased by £2.3 billion to £39.5 billion, as pay rises and inflation increased running costs

• net social benefits paid by central government increased by £1.8 billion to £27.9 billion; this was largely caused by inflation-linked increases in many benefits and earnings-linked increases to state pension payments

• payments to support the day-to-day running of local government increased by £0.8 billion to £12.2 billion; these intra-government transfers are both central government spending and a local government receipt, so they have no effect on overall public sector borrowing

Central government debt interest costs

Borrowing is largely financed by the issuance of central government gilts by the Debt Management Office, on which interest is paid to investors.

Central government debt interest payable in January 2026 was £1.5 billion, £5.0 billion less than in January last year.

The interest payable on index-linked gilts rises and falls with the RPI, adding volatility to central government debt interest costs. This additional RPI inflation-linked component of interest is described as “capital uplift” and affects the value of the gilt principal.

In January 2026, the capital uplift reduced the total central government interest payable by £2.8 billion. This largely reflects the 0.4% decrease in the RPI between October and November 2025.

Capital uplift is accrued throughout the life of each index-linked gilt but is paid to gilt holders as interest at redemption. Accrued capital uplift is shown as the light blue portion of each stacked bar in Figure 2.

Central government net investment

Central government net investment was £12.4 billion in January 2026, £0.7 billion less than in January 2025.

This decrease was largely because of a £3.0 billion reduction in the quarterly payment from HM Treasury to the Bank of England (BoE) Asset Purchase Facility (APF) Fund compared with a year earlier.

These intra-public sector transfers have no impact on overall public sector borrowing because they are recorded as both central government spending and Bank of England receipts.

Comparing our January 2026 borrowing estimates with official forecasts

The independent Office for Budget Responsibility (OBR) is responsible for the production of official forecasts for the UK government. These forecasts are usually produced twice a year, in spring and autumn.

The latest forecast was published in the OBR’s Economic and fiscal outlook - November 2025 report.

The UK government has announced that the Spring forecast will be published on 3 March 2026.

The public sector spent more than it received in taxes and other income in the financial year (FY) to January 2026.

Provisional estimates show borrowing is £112.1 billion over the 10-month period. This is £14.6 billion, or 11.5% less than in the FY to January 2025, and £8.3 billion less than the £120.4 billion forecast by the Office for Budget Responsibility.

Our Public sector finances borrowing by subsector: Appendix R dataset provides further detail on data presented in Table 3, including transactions related to borrowing by each subsector and their contribution to total public sector borrowing in a matrix table format. The time period presented in the matrix table can be changed using the dropdown box feature.

Central government net borrowing

Central government forms the largest part of the public sector and the relationship between its receipts and expenditure is an important determinant of public sector net borrowing. Of the £112.1 billion borrowed by the public sector in the FY to January 2026, central government borrowed £111.0 billion, with amounts borrowed by other smaller subsectors largely offsetting each other.

Central government current receipts

Central government’s current receipts were £922.0 billion in the FY to January 2026, which is £71.4 billion or 8.4% more than in the same 10-month period a year ago. Of this £71.4 billion increase in income:

• central government tax receipts increased by £46.2 billion to £698.4 billion; this included increases of £28.0 billion in Income Tax, £7.8 billion in Value Added Tax (VAT), and £4.7 billion in Corporation Tax receipts

• compulsory social contributions increased by £26.1 billion to £166.4 billion, as changes to the rate of National Insurance contributions paid by employers came into effect on 6 April 2025

A detailed breakdown of central government income is presented in our Public sector current receipts: Appendix D dataset.

Central government current expenditure

Central government’s current expenditure, spending to fund its day-to-day activities, was provisionally estimated at £915.7 billion in the FY to January 2026, which is £58.4 billion or 6.8% more than in the same 10-month period a year ago. Of this £58.4 billion increase in spending:

• central government departmental spending on goods and services increased by £26.9 billion to £384.9 billion, as pay rises and inflation increased running costs

• net social benefits paid by central government increased by £18.7 billion to £275.0 billion, largely caused by inflation-linked increases in many benefits (including Universal Credit), and earnings-linked increases to state pension payments

• interest payable on central government debt increased by £8.0 billion to £81.4 billion, largely because the interest payable on index-linked gilts rises and falls with the Retail Prices Index

• payments to support the day-to-day running of local government increased by £2.3 billion to £123.5 billion; these intra-government transfers have no impact on overall public sector borrowing

Central government net investment

Central government net investment was £81.3 billion in the FY to January 2026, which is £12.4 billion less than in the same 10-month period a year ago.

Over this period, central government made payments totalling £16.7 billion to the Bank of England (BoE) Asset Purchase Facility Fund, which is £19.7 billion less than in the same 10-month period of 2024.

These payments are recorded as both central government net investment expenditure and BoE receipts, so have no impact on overall public sector borrowing.

Local government borrowing

Initial estimates show that local government borrowing was £11.6 billion in the FY to January 2026. This was £0.7 billion less than in the same 10-month period a year ago.

Local government data for the financial year to January 2026 are provisional estimates for the UK. They are largely based on budget data for England, Scotland, and Wales, with estimates included for Northern Ireland. Further information on the quality of our local government data is discussed in Section 11: Data sources and quality.

Public corporations’ borrowing

Initial estimates show that public corporations were in surplus by £2.9 billion in the FY to January 2026. This was a £1.7 billion larger surplus than in the same 10-month period a year ago.

Borrowing figures for public corporations in the current financial year are highly provisional and primarily based on the OBR’s Economic and fiscal outlook - November 2025 report.

Estimates for FYE March 2024 and FYE March 2025 use the Economic and fiscal outlook - October 2024 report, supplemented by in year data for train operating companies, the Housing Revenue Account, and surveyed public corporations.

Comparing our financial year to January 2026 estimates with official forecasts

Financial year-to-date comparisons offer a more reliable view of overall trends, while monthly figures can be more prone to short-term forecast volatility.

Provisional estimates show the public sector borrowed £152.7 billion in the financial year ending (FYE) March 2025. This was the third-highest amount borrowed in any financial year since records began in FYE March 1947. However, these estimates have not been adjusted for inflation.

Expressing borrowing as a ratio of gross domestic product (GDP), the value of everything produced in the UK economy in a 12-month period, gives an estimate of its affordability and provides a more consistent measure for comparison of the UK’s fiscal position over time.

In the financial year to January 2026, borrowing has been provisionally estimated at 3.7% of GDP. This was 0.7 percentage points less than during the same 10-month period a year ago and was the fifteenth-highest borrowing ratio in any April to January period since monthly records began in 1993.

The Office for Budget Responsibility forecasts that borrowing will reach 4.5% of GDP in the financial year to March 2026.

The public sector balance sheet describes its financial position at a point in time. It shows its liabilities (amounts owed) and its assets (amounts owned). There are several measures of the public sector balance sheet that we discuss in our What the UK government owns and what it owes blog.

As a part of the quantitative easing activities of the Bank of England (BoE), it purchased central government gilts from the market through the Asset Purchase Facility (APF) fund. These gilt holdings consolidate within the public sector balance sheet, leaving only the difference between their purchase price and their redemption value.

Subsequent movements in the market value of these consolidated gilt holdings have no impact on the public sector balance sheet.

The reserves created by the BoE and subsequently loaned to the APF to purchase these gilts remain on the public sector balance sheet as a liability in currency and deposits until the loan is repaid.

Our Public sector balance sheet tables: Appendix N dataset presents a detailed reconciliation between the balance sheet measures summarised in Table 5.

Public sector net debt

Public sector net debt excluding public sector banks (PSND ex) is a widely quoted balance sheet measure.

Expressing net debt as a ratio of gross domestic product (GDP) gives an estimate of its affordability and provides a more consistent measure for comparison of the UK’s fiscal position over time.

The net debt-to-GDP ratio at the end of January 2026 was provisionally estimated at 92.9%, which is equal to that of 12-months ago. This was 2.4 percentage points below the Office for Budget Responsibility’s November 2025 forecast; however, this is a highly provisional estimate.

Our How the ONS estimates UK debt to GDP figures blog explains why our estimates of the debt to GDP ratio are susceptible to revision.

Public sector net financial liabilities

Public sector net financial liabilities (PSNFL ex) were 82.4% of GDP at the end of January 2026, 1.7 percentage points more than at the end of January 2025.

PSNFL ex adds further financial assets and financial liabilities to those recorded in debt (PSND ex).

These extra financial assets are currently valued at more than the extra financial liabilities. This means that at 82.4% of GDP, PSNFL ex was 10.5 percentage points of GDP less than PSND ex at the end of January 2026.

We explain the financial assets and liabilities captured in PSNFL ex in our Public sector net financial liabilities (PSNFL) methodology.

Additionally, we published a blog explaining the PSNFL measure, because it has been selected by the UK government as the reference for a balance sheet fiscal rule.

The additional financial assets and liabilities included in PSNFL ex that fall outside of the PSND ex boundary are not updated monthly. Instead, they are updated quarterly, or when data become available. These data were last updated on 19 December 2025 and will next be updated on 20 March 2026.

A more detailed presentation of the public sector balance sheet is available in our Public sector net worth: Appendix O dataset, released on 19 December 2025.

The UK government has legislated for fiscal targets to constrain its management of the public finances. The Autumn Budget 2024 announced that from January 2025, these fiscal targets focus on the public sector current budget deficit and public sector net financial liabilities.

The targets are that by the end of the financial year ending (FYE) 2030, the current budget should be brought into surplus, and that public sector financial liabilities should be falling relative to the size of the economy (or gross domestic product - GDP) compared with the previous year.

Our latest figures show that:

• the public sector current budget deficit was £76.7 billion in the FYE March 2025; this was £10.2 billion more than in the FYE March 2024

• public sector net financial liabilities were provisionally estimated at 81.1% of GDP at the end of March 2025; this was 1.6 percentage points more than at the end of March 2024

The data for the latest months of every release contain a degree of forecasts. These are then replaced by improved estimates, as further data are made available, and finally by outturn data.

Our Public sector finance revisions analysis: Appendix P dataset records monthly borrowing data, as at first and at subsequent publications, graphically illustrating any potential bias to our early estimates.

Revisions to public sector net borrowing in the financial year to December 2025

Since publishing our Public sector finances, UK: December 2025 bulletin, we have increased our estimate of public sector net borrowing (PSNB ex) in the first nine months of the financial year by £2.0 billion to £142.4 billion.

This increase was because of regular monthly updates to our central government data, with our previous estimate of receipts reduced by £1.2 billion, and spending increased by £0.8 billion.

More specifically, we reduced each of our estimates for both total central government tax receipts and National Insurance contributions by £0.6 billion. Meanwhile we increased our estimate of expenditure on goods and services by £0.4 billion and our estimate of current grants (excluding those paid to local government) by £0.5 billion.

Revisions to public sector net borrowing in the financial year ending March 2025

We have reduced our estimate of borrowing in FYE March 2025 by £0.5 billion to £152.7 billion. This reduction was because of updated source data, specifically a reduction of £0.5 billion to our previous estimate of Corporation Tax receipts.

Revisions to public sector net debt at the end of December 2025

We have reduced our estimate of public sector net debt (PSND ex) at the end of December 2025 by £12.1 billion to £2,923.7 billion. This is because of regular monthly updates to data used to estimate the Bank of England’s contribution to debt, which are published one month in arrears.

Revisions to gross domestic product

This month we have updated our previous estimates of nominal gross domestic product (GDP) with those published in our release GDP first quarterly estimate, UK: October to December 2025 statistical bulletin on 12 February 2026.

Published GDP in the latest quarter was slightly higher than previously estimated, meaning that our headline balance sheet figures expressed as a ratio of GDP reduced by 0.1 percentage points in recent periods because of this update.

Combined with the reduction to our previous estimate of net debt, we have lowered our estimate of debt as a percentage of GDP at the end of December 2025 from 95.5% to 95.0%.

Our How the ONS estimates UK debt to GDP figures blog post explains why our estimates of the debt-to-GDP ratio are susceptible to revision.

Public sector

The UK public sector comprises of six subsectors: central government, local government, public non-financial corporations, public-sector-funded pensions, the Bank of England, and public financial corporations.

Figures in this release exclude public sector banks, following the reclassification of NatWest Group to the private sector in June 2024.

Public sector net borrowing

Public sector net borrowing (often referred to as the deficit) is the gap between total expenditure and current receipts. A surplus is shown as a negative figure.

Public sector current budget deficit

Public sector current budget deficit is the difference between current expenditure and current receipts, after accounting for depreciation. It measures the borrowing needed to fund day-to-day activities and is the reference statistic for a UK government fiscal rule. A negative value indicates a surplus.

Both current budget deficit and borrowing are recorded on an accrual basis, that is income when earned and spending when incurred, rather than when cash is paid.

Central government net cash requirement

The central government net cash requirement is the cash the government must raise from financial markets to finance its activities. It reflects the timing of payments and receipts rather than when liabilities arise.

Public sector net debt

Public sector net debt (often referred to as the national debt) measures the public sector’s liabilities to the private sector and overseas, net of its liquid financial assets.

Public sector net financial liabilities

Public sector net financial liabilities (often referred to as PSNFL) is a broader balance sheet measure than net debt, capturing all financial assets and liabilities recognised in the national accounts. PSNFL is the reference statistic for a UK government fiscal rule.

Adding non-financial assets to PSNFL results in public sector net worth, the widest measure of the public sector balance sheet.

About the statistics

About our data sources

HM Revenue and Customs data quality review

On 8 October 2025, HM Revenue and Customs (HMRC) reported an under-estimation in its VAT cash receipts data for the period April to August 2025. HMRC has implemented immediate improvements to quality assurance processes, including comparisons with independent data sources, working with HM Treasury and the Office for National Statistics (ONS). HMRC will also carry out a robust review across all receipts to consider the underlying issue and to identify actions to minimise the risk of similar incidents in future.

We are working with HM Treasury to support this process. The Office for Statistics Regulation will provide an independent perspective on HMRC’s review to ensure compliance with the Code of Practice for Statistics.

We reported on progress with work to improve the quality of public sector finance statistics as part of the first quarterly update on the Economic Statistics Plan in our ONS strategic improvement update: December 2025, published on 4 December 2025.

We discuss our plans to deliver further improvements to the quality of our core statistics in our Driving Forward: Our Plans for 2026 and Beyond blog, published on 12 January 2026.

Local government data quality

Local government data for the financial year ending (FYE) March 2026 are provisional estimates for the UK. They are largely based on budget data for England, Scotland, and Wales, and with estimates included for Northern Ireland.

For FYE March 2025, estimates of the current expenditure of local authorities in England are based on published first release data, while capital expenditure and receipts are based on published final outturn data.

Estimates for the devolved administrations for FYE March 2025 are based on published outturn data for Wales, published provisional outturn data for Scotland, and estimates for Northern Ireland.

In recent years, planned local government expenditure initially reported in local authority budgets has been systematically lower than final outturn current expenditure reported in the audited accounts, and generally higher than that reported in final outturn capital expenditure. Therefore, we may include adjustments to increase or decrease the amounts reported at the budget stage.

For FYE March 2025, these adjustments include:

• a £2.4 billion upward adjustment to Scotland’s current expenditure

For FYE March 2026, these adjustments include:

• a £2.0 billion upward adjustment to England’s current expenditure

• a £0.5 billion upward adjustment to England’s capital expenditure

• a £2.4 billion upward adjustment to Scotland’s current expenditure

To reflect the most recently available data for housing benefits, we have applied a further £3.0 billion downward adjustment to current expenditure in the FYE March 2026.

Statistical designation

The Office for Statistics Regulation (OSR) independently reviewed the public sector net borrowing, cash requirement and debt accredited official statistics in June 2017. They comply with the standards of trustworthiness, quality, and value in the Code of Practice for Statistics and should be labelled “accredited official statistics”.

The public sector net financial liabilities and public sector net financial worth statistics are both official statistics. These measures were introduced after June 2017, so have not yet been reviewed by the OSR.

The public sector net worth statistics are labelled as “official statistics in development”. They are based on information from public sector finance and data but in ONS’ non-financial accounts. We are developing how we collect the data and produce the statistics to improve their quality.