Public sector finances, UK: May 2026

• Borrowing - the difference between total public sector spending and income - was £23.3 billion in May 2026; this was £5.4 billion (30.4%) more than in May 2025, and £5.6 billion more than the £17.7 billion forecast by the Office for Budget Responsibility (OBR).

• Central government debt interest payable was £11.7 billion in May 2026; this was £4.1 billion (54.4%) more than in May 2025 and the highest in any May on record (not adjusted for inflation).

• Borrowing in the financial year (FY) to May 2026 was £46.3 billion; this was £8.9 billion (23.9%) more than in the FY to May 2025, and £7.7 billion more than the £38.6 billion forecast by the OBR.

• Borrowing in the FY to May 2026 was 1.5% of gross domestic product (GDP); this was 0.2 percentage points more than in the FY to May 2025, and the fifth highest value since monthly records began, in 1993.

• The current budget deficit - borrowing to fund day-to-day public sector activities - was £18.5 billion in May 2026, bringing the total current deficit in the FY to May 2026 to £34.5 billion; this was £7.0 billion (25.5%) more than in the FY to May 2025, and £6.0 billion more than the £28.5 billion forecast by the OBR.

• Public sector net debt - a measure of the amount of money owed to the UK private sector and overseas less any liquid assets held - was provisionally estimated at 95.1% of GDP at the end of May 2026; this was 0.4 percentage points more than in May 2025 and remains at levels last seen in the early 1960s.

• Public sector net financial liabilities - which consider a wider range of financial assets and liabilities than net debt - were provisionally estimated at 84.7% of GDP at the end of May 2026; this was 10.4 percentage points of GDP less than debt.

• Central government net cash requirement (excluding UK Asset Resolution Limited and Network Rail Limited) - the additional cash needed to be raised from the financial markets to finance activities - was £25.3 billion in May 2026, which was £1.3 billion (5.2%) more than in May 2025.

The public sector borrowed £23.3 billion in May 2026, £5.4 billion more than in May 2025. This was the second highest borrowing in any May on record (not adjusted for inflation).

Our Public sector finances borrowing by subsector: Appendix R dataset provides further detail on data presented in Table 1 and includes the option to select other time periods.

Central government borrowing

Central government forms the largest part of the public sector and includes government departments such as the Department of Health and Social Care, the Department for Work and Pensions and the Department for Education.

The relationship between central government's receipts and expenditure is an important determinant of public sector net borrowing.

Central government receipts

Central government's receipts were £85.5 billion in May 2026, which was £3.4 billion (4.1%) more than in May 2025. Of this £3.4 billion increase in income:

• central government tax receipts increased by £2.7 billion to £63.7 billion; this included increases of £1.2 billion in Value Added Tax (VAT) receipts, £0.9 billion in Income Tax receipts, and £0.4 billion in Corporation Tax receipts

• compulsory social contributions (which are largely comprised of receipts from National Insurance Contributions) increased by £0.3 billion, to £15.9 billion

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

The forecasts underlying current HM Revenue and Customs tax estimates reflect the expectations published in the Economic and fiscal outlook - March 2026 report from the Office for Budget Responsibility (OBR).

Central government current expenditure

Central government spending data for May 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 at £95.7 billion in May 2026, which was £6.4 billion (7.1%) more than in May 2025. Of this £6.4 billion increase in spending:

• central government debt interest payable increased by £4.1 billion to £11.7 billion, with movements in the Retail Prices Index (RPI) adding volatility to the monthly debt interest costs

• central government departmental spending on goods and services increased by £2.2 billion to £39.6 billion, as inflation increased the cost of providing public services

• net social benefits paid by central government increased by £1.2 billion to £28.4 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 decreased by £1.4 billion to £10.6 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 May 2026 was £11.7 billion; this was £4.1 billion more than in May 2025 and the highest in any May on record (not adjusted for inflation).

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.

Capital uplift increased the total central government interest payable by £4.9 billion in May 2026. This largely reflects the 0.8% increase in the RPI between February and March 2026.

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 current budget deficit

Central government current budget deficit - the portion of net borrowing that funds day-to-day activities - was £14.0 billion in May 2026. This was £3.3 billion more than in May 2025, and £2.8 billion more than the £11.2 billion forecast by the OBR.

The £14.0 billion current budget deficit in May 2026 was the difference between the £85.5 billion in current receipts (income) and the £95.7 billion in current spending, while taking into account of £3.9 billion in depreciation.

Our Public sector finances borrowing by subsector: Appendix R dataset provides further detail on central government current budget deficit data, as well as data on the other subsectors of the public sector.

Central government net investment

Central government net investment was £6.9 billion in May 2026, £2.0 billion more than in May 2025. This increase was largely because of the timing of capital payments made to local authorities, which were £1.1 billion higher than in in May 2025, but have a neutral effect on overall public sector borrowing. There was also another £0.6 billion in increases in both central government gross capital formation and capital payments to the private sector.

Comparing our May 2026 borrowing estimates with official forecasts

The 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 forecasts were published by the OBR in its Economic and fiscal outlook - March 2026 report, on 3 March 2026. This subsection compares our provisional estimates for May 2026 with the corresponding forecasts published by the OBR.

Public sector borrowing was £5.6 billion higher than forecast in May 2026, largely because central government borrowing was more than anticipated.

Borrowing in the financial year (FY) to May 2026 was £46.3 billion. This was £8.9 billion (23.9%) more than in the FY to May 2025, and £7.7 billion more than the £38.6 billion forecast by the Office for Budget Responsibility (OBR).

Our Public sector finances borrowing by subsector: Appendix R dataset provides further detail on data presented in Table 3 and includes the option to select other time periods.

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.

Central government receipts

Central government's receipts were £172.2 billion in the FY to May 2026, which was £6.9 billion (4.1%) more than in the same two-month period a year ago. Of this £6.9 billion increase in income:

• central government tax receipts increased by £5.2 billion to £128.5 billion; this included increases of £2.5 billion in Income Tax receipts, £1.2 billion in Value Added Tax (VAT) receipts, and £0.7 billion in Corporation Tax receipts

• compulsory social contributions (which are largely comprised of receipts from National Insurance Contributions) increased by £1.0 billion to £31.7 billion

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 £195.9 billion in the FY to May 2026, which was £11.9 billion (6.5%) more than in the same two-month period a year ago. Of this £11.9 billion increase in spending:

• interest payable on central government debt increased by £4.7 billion to £21.5 billion, largely because the interest payable on index-linked gilts rises and falls with the Retail Prices Index

• central government departmental spending on goods and services increased by £4.1 billion to £78.6 billion, as pay rises and inflation increased running costs

• net social benefits paid by central government increased by £4.0 billion to £57.9 billion, largely caused by inflation-linked increases in many benefits (including Universal Credit), and earnings-linked increases to State Pension payments

• payments to support the day-to-day running of local government decreased by £1.6 billion to £27.2 billion; these intra-government transfers have no impact on overall public sector borrowing

Central government current budget deficit

Central government current budget deficit - the portion of net borrowing that funds day-to-day activities - was £31.4 billion in the FY to May 2026 This was £5.6 billion more than the same two-month period a year ago, and £4.1 billion more than the £27.3 billion forecast by the OBR.

The £31.4 billion current budget deficit in the FY to May 2026 was the difference between the £172.2 billion in current receipts (income) and the £195.9 billion in current spending, while taking into account of £7.7 billion depreciation.

Our Public sector finances borrowing by subsector: Appendix R dataset provides further detail on central government current budget deficit data, as well as data on the other subsectors of the public sector.

Central government net investment

Central government net investment was £20.9 billion in the FY to May 2026, which was £4.1 billion more than in the FY to May 2025.

Over this period, central government made payments totalling £5.1 billion to the Bank of England (BoE) Asset Purchase Facility Fund, which was £1.0 billion more than in the FY to May 2025. These payments are recorded as both central government net investment expenditure and BoE receipts, so have no effect on overall public sector borrowing.

There was also an increase of £1.6 billion in central government gross capital formation, as well as increases in capital payments to other sectors. These payments included an increase of £1.0 billion in capital payments to local authorities, which are public sector borrowing neutral, meaning this increase had no effect on overall public sector borrowing.

Local government borrowing

Initial estimates show that local government was in surplus by £2.2 billion in the FY to May 2026; this surplus was smaller by £1.1 billion than in the FY to May 2025.

Local government data for the current financial year are highly provisional estimates for the UK. They are largely based on the OBR's Economic and fiscal outlook - March 2026 report.

Further information on the quality of our local government data is discussed in Section 11: Data sources and quality.

In our Government expenditure in the UK article, we discuss the types of government expenditure and their trends over the last 30 years, including current and capital spending by central and local government.

Public corporations' borrowing

Initial estimates show that overall, public corporations' borrowing was £0.1 billion in the FY to May 2026; this was £0.4 billion more than in the FY to May 2025, when there was a surplus of £0.3 billion.

Public corporations' data for the current financial year are highly provisional estimates for the UK. They are largely based on the OBR's Economic and fiscal outlook - March 2026 report.

Further information on the quality of our public corporations' data is discussed in Section 11: Data sources and quality.

Comparing our financial year to May 2026 borrowing estimates with official forecasts

The OBR is responsible for the production of official forecasts for the UK government.

The latest forecasts were published by the OBR in its Economic and fiscal outlook - March 2026 report, on 3 March 2026. This section compares our provisional estimates for the financial year to May 2026 with the corresponding forecasts published by the OBR.

Public sector borrowing was £7.7 billion higher than forecast in the FY to May 2026, largely because central government borrowing was more than anticipated.

Provisional estimates show that the public sector borrowed £128.0 billion in the financial year ending (FYE) March 2026. This is the sixth-highest amount borrowed in any financial year since records began in the 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 is recommended for comparison of the UK's fiscal position over time.

Borrowing was provisionally estimated at 4.2% of GDP in the FYE March 2026.

This was 1.0 percentage points less than in the FYE March 2025 and is the 37th highest borrowing ratio in any financial year since records began in the FYE March 1901.

Our provisional estimate is broadly in line with the Office for Budget Responsibility forecast of 4.3% of GDP.

Borrowing in the financial year (FY) to May 2026 was 1.5% of GDP. This was 0.2 percentage points more than in the FY to May 2025, and the fifth highest since monthly records began in 1993.

The public sector balance sheet describes its financial position at a point in time. It shows its liabilities and assets. 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 effect 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 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 May 2026 was provisionally estimated at 95.1%; this was 0.4 percentage points more than in May 2025 and 0.7 percentage points more than the 94.4% forecast by the Office for Budget Responsibility (OBR) in March 2026.

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) has a broader scope than debt (PSND). It adds further financial assets and financial liabilities to those recorded in PSND.

PSNFL was 84.7% of GDP at the end of May 2026, which was 1.9 percentage points more than at the end of May 2025.

These extra financial assets are currently valued at more than the extra financial liabilities, meaning that PSNFL was 10.4 percentage points of GDP less than PSND at the end of May 2026.

We explain the financial assets and liabilities captured in PSNFL 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 that fall outside of the PSND boundary are not updated monthly. Instead, they are updated quarterly, or when data become available. These data were last updated on 19 June 2026 and will next be updated on 22 September 2026.

A detailed presentation of public sector net financial liabilities is available in our Public sector net financial liabilities by subsector: Appendix G dataset, last updated on 19 June 2026.

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 £47.1 billion in the FYE March 2026; this was £29.2 billion less than in the FYE March 2025

• public sector net financial liabilities were initially estimated at 83.2% of GDP at the end of March 2026; this was 2.2 percentage points more than at the end of March 2025

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.

Notable updates in June 2026

Some of the data used to compile monthly public sector finance statistics are sourced quarterly from the wider national accounts, or updated annually from published datasets.

This month, we have:

• updated local government and public corporations' estimates using the latest available quarterly data; this includes data for local authorities in England for the FYE March 2026, published by the Ministry of Housing, Communities and Local Government

• incorporated annual updates to our Student loans and COVID-19 loan guarantee datasets

Canal and River Trust

This month, we have implemented the reclassification of the Canal and River Trust from the public corporations' subsector to the private sector, effective from October 2023.

As part of this work, we reviewed the historical treatment of the trust while it was classified as a public corporation, including the recording of boat licence income within fiscal statistics.

This update has a limited effect on the public sector balance sheet. Public sector net debt increased by approximately £0.2 billion as of end-September 2023, alongside a corresponding reduction of around £0.1 billion in public sector net financial liabilities. This change had a negligible effect on public sector net borrowing.

Further detail on the fiscal treatment of the Canal and River Trust and boat licences is provided in our Economic statistics classifications and developments in public sector finances: April 2026 article.

Revisions to public sector net borrowing in April 2026

Since releasing our Public sector finances, UK: April 2026 bulletin, we have reduced our previous estimate of public sector net borrowing (PSNB ex) in April 2026 by £1.3 billion to £23.0 billion, reflecting updated central government data.

Central government receipts have been revised up by £1.2 billion, following the replacement of forecasts with reported data.

Central government spending has been revised down by £0.7 billion overall. Our previous estimate of current grants to local authorities was reduced by £0.6 billion, reducing central government borrowing but increasing local authority borrowing by equal and offsetting amounts.

Revisions to public sector net borrowing in the financial year ending March 2026

Since releasing our Public sector finances, UK: April 2026 bulletin, we have reduced our previous estimate of public sector net borrowing (PSNB ex) in the financial year ending (FYE) March 2026 by £1.0 billion, to £128.0 billion.

Following the routine quarterly update of local authority data, estimated local government borrowing for the 12 months to March 2026 has been reduced by £2.2 billion. This is largely because of a £1.9 billion downward revision to local authorities' gross fixed capital formation, alongside a range of other smaller, largely offsetting changes.

The reduction in local government borrowing was partially offset by upward revisions of £0.5 billion to both central government and public corporations' net borrowing.

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

Since releasing our Public sector finances, UK: April 2026 bulletin, we have reduced our previous estimate of public sector net borrowing (PSNB ex) in the FYE March 2025 by £0.3 billion, to £151.5 billion

This change largely reflects a downward revision of £0.8 billion to the capital transfer associated with our recording of coronavirus (COVID-19)-related loan guarantees, partially offset by a range of other smaller changes.

Revisions to public sector net debt at the end of April 2026

Since releasing our Public sector finances, UK: April 2026 bulletin, we have reduced our previous estimate of public sector net debt (PSND ex) at the end of April 2026 by £2.2 billion, to £2,940.8 billion.

This change was largely because a reduction of £3.2 billion to our previous estimate of the Bank of England's (BoE) contribution to debt. This change was largely because of updates to our previous estimate of the BoE's liabilities (reducing by £1.2 billion) and liquid assets data (increasing by £1.7 billion).

Large changes to our estimate of the BoE's contribution are not uncommon because some of the data used in these estimates are published in arrears by one month.

In addition to the updates to our BoE dataset, we have made our regular quarterly updates to previous estimates of both public corporations' and local government balance sheet data.

Revisions to public sector net financial liabilities at the end of April 2026

Since releasing our Public sector finances, UK: April 2026 bulletin, we have reduced our previous estimate of public sector net financial liabilities excluding public sector banks (PSNFL ex) at the end of April 2026 by £0.5 billion, to £2,613.2 billion.

This overall reduction reflects offsetting revisions to the components of PSNFL ex, including:

• a £2.2 billion reduction in our previous estimate of net debt

• an £8.5 billion increase in our previous estimate of additional financial liabilities outside the boundary of net debt

• a £6.8 billion increase in our previous estimate of additional financial assets outside the boundary of net debt

The additional financial assets and liabilities used in the calculation of our PSNFL ex measure are reported in arrears by a quarter, so large revisions are not uncommon.

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 difference between total expenditure and receipts. Positive numbers indicate a deficit, while negative numbers indicate a surplus.

Public sector current budget deficit

Public sector current budget deficit is the difference between current expenditure and 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. Positive numbers indicate a deficit, while negative numbers indicate 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 or net financial debt) 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.

Public sector net worth

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

Statistical designation

The Office for Statistics Regulation (OSR) independently reviewed the public sector net borrowing, cash requirement, and debt statistics in June 2017, concluding that 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 from ONS's non-financial accounts.

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 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 is carrying 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 second quarterly update on the Economic Statistics Plan in our ONS strategic improvement update: April 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 the FYE March 2025, estimates of the current expenditure of local authorities in England are based on published second release data, while capital expenditure and receipts are based on published final outturn data.

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

In recent years, planned local government current and capital expenditure in local authority budgets have differed from the final outturn expenditure reported in the audited accounts, with current expenditure systematically lower than what was reported at final outturn.

Therefore, we may include adjustments to increase or decrease the amounts reported at the budget stage.

For the FYE March 2026, these adjustments include:

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

• a £3.0 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 £2.7 billion downward adjustment to current expenditure in the FYE March 2026.

Public corporations' data quality

Public corporations' data for the current financial year are highly provisional estimates for the UK. They are largely based on the OBR's Economic and fiscal outlook - March 2026 report.

Estimates for the FYE March 2025 and FYE March 2026 remain largely based on the OBR's Economic and fiscal outlook - November 2025 report, supplemented by in-year data for train operating companies, the Housing Revenue Account, and surveyed public corporations.