Public sector finances, UK: September 2026

Borrowing was nearly £25 billion in September 2026, a little higher than a year earlier, as spending, including higher debt interest costs, increased more than government income, partly reflecting the impacts of inflation.

Borrowing in the financial year to September 2026 remained below the same period last year, although it was higher than the Office for Budget Responsibility's forecast.

Debt at the end of September 2026 was provisionally estimated to have exceeded £3 trillion for the first time. However, as a proportion of the economy, debt was lower than a year earlier.

Public sector net borrowing

• Borrowing – the difference between total public sector spending and income – was £24.5 billion in September 2026; this was £1.8 billion (7.7%) more than in September 2025 and £1.9 billion above the Office for Budget Responsibility (OBR) forecast.

• Central government debt interest payable was £10.9 billion in September 2026; this was £1.6 billion (16.6%) more than in September 2025 and £2.0 billion above the OBR forecast.

• Borrowing was £97.8 billion in the financial year (FY) to September 2026; this was £4.4 billion (4.3%) less than in the same period last year but £6.0 billion above the OBR forecast.

• Borrowing in the FY to September 2026 was 3.1% of gross domestic product (GDP), 0.3 percentage points lower than a year earlier but the 10th highest April-to-September figure since monthly records began in 1993.

Public sector current budget deficit

• The current budget deficit – borrowing used to fund day-to-day public sector activities – was £15.8 billion in September 2026, bringing the total in the FY to September 2026 to £64.0 billion; this was £5.7 billion (8.2%) less than in the same period last year, but £2.4 billion above the OBR forecast.
  

Public sector net debt

• Public sector net debt – the amount owed to the UK private sector and overseas, less liquid assets – exceeded £3 trillion for the first time, although this is a provisional estimate and may be revised as more data become available.

• Public sector net debt first exceeded £2 trillion in June 2020, during the coronavirus (COVID-19) pandemic, having first exceeded £1 trillion in February 2010 following the global financial crisis.

• Public sector net debt was provisionally estimated at £3,005.0 billion at the end of September 2026, £91.7 billion more than a year earlier and equivalent to 94.0% of GDP, 0.7 percentage points lower than a year earlier but at levels last seen in the early 1960s.

Public sector net financial liabilities

• Public sector net financial liabilities – a wider balance sheet measure than net debt, which includes additional financial assets and liabilities – were provisionally estimated at £2,643.4 billion at the end of September 2026, £121.7 billion more than a year earlier.

• Net financial liabilities were 82.7% of GDP at the end of September 2026; this was 0.7 percentage points higher than a year earlier and 11.3 percentage points lower than net debt, as the additional financial assets included exceed the additional financial liabilities.

Central government net cash requirement

• 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 £16.9 billion in September 2026; this was £1.0 billion (6.5%) more than in September 2025 and £7.3 billion below the OBR forecast.

Consultation on release times for market-sensitive economic statistics

We are reviewing the release times for our market-sensitive economic statistics, such as Public sector finances. This review will consider whether the current arrangements continue to best serve the public good, support user needs and align with the principles set out in the Code of Practice for Statistics.

We are running a consultation to gather evidence on the impact of different release times. The consultation asks how you use market-sensitive economic statistics, your views on potential release time options, and any other considerations. Please note that this consultation will be closing on Friday 30 October 2026.

Public sector borrowing was £24.5 billion in September 2026, the second-highest September on record behind that of 2020 (not adjusted for inflation). This was £1.8 billion (7.7%) higher than a year earlier, because spending growth outpaced the increase in receipts.

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 is the largest subsector of the public sector and is typically the main contributor to changes in monthly public sector borrowing. Despite higher tax receipts, central government borrowing was £21.2 billion in September 2026, £1.5 billion more than a year earlier.

Central government receipts

Strong growth in income-related taxes contributed to higher tax receipts in September 2026 compared with a year earlier.

Our Public sector current receipts: Appendix D dataset provides a detailed breakdown of central government income.

Central government current expenditure

Central government spending data for September 2026 are provisional and are subject to revision as more detailed departmental information becomes available. Increases this month were spread quite evenly across the larger components, with spending on public services, interest, benefits and other costs all higher than a year earlier.

Winter Fuel Payments

Each September the estimated cost of the annual Winter Fuel Payments are included as central government social benefit payments. Although payments are made each year to recipients from November onwards, eligibility is determined in the previous September and, in line with international statistical guidance, the liability is recognised at that point. We estimate £1.9 billion accrued to September 2026 in respect of these payments.

Central government debt interest costs

Central government borrowing is mainly financed by gilts issued by the Debt Management Office. The UK government then pays interest to the investors who hold these gilts.

Central government debt interest payable was £10.9 billion in September 2026. This was the highest September figure since monthly records began in 1997 (not adjusted for inflation), and only the eighth time interest payable has exceeded £10.0 billion in a single month.

The interest payable on index-linked gilts rises and falls with the Retail Prices Index (RPI), adding volatility to central government debt interest costs. 

Of the £10.9 billion payable in September 2026, £4.0 billion reflected the capital uplift on index-linked gilts, largely because of the 0.6% increase in the RPI between June and July 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 3.

Central government current budget deficit

The central government current budget deficit, which represents the amount of borrowing required to fund its day-to-day activities, was £12.4 billion in September 2026, £2.3 billion more than in September 2025.

The September 2026 deficit reflects the difference between £90.1 billion in current receipts and £98.6 billion in current expenditure, after accounting for £3.9 billion in depreciation.

The current budget balance excludes borrowing to finance capital investment and therefore provides an indication of whether current receipts are sufficient to meet the costs of day-to-day public services, welfare and administration.

Our Public sector finances borrowing by subsector: Appendix R dataset presents central government current budget deficit as a component of the total public sector current budget deficit. It also provides an additional breakdown of its components.

One of the government's fiscal objectives is to achieve a surplus in the public sector current budget by the financial year ending March 2030. Further information is provided in Section 6: UK fiscal targets.

Comparing our September 2026 borrowing estimates with official forecasts

Public sector borrowing was £1.9 billion above forecast in September 2026, largely because central government borrowed more than anticipated.

The Office for Budget Responsibility (OBR) produces the UK government's official fiscal forecasts, usually twice a year. The latest forecast used in this bulletin was published by the OBR in its Economic and fiscal outlook – March 2026 report on 3 March 2026, with corresponding monthly profiles published in April 2026. 

The UK government has confirmed that the date of the 2026 Budget will be Wednesday 28 October. The OBR will publish an updated set of fiscal forecasts to accompany the Budget.

Borrowing in the financial year (FY) to September 2026 was £97.8 billion. This was £4.4 billion (4.3%) less than in the same period last year but £6.0 billion above the Office for Budget Responsibility (OBR) forecast.

Our Public sector finances borrowing by subsector: Appendix R dataset provides further detail on data presented in Table 5 and includes the option to select other time periods.

Central government receipts and expenditure

Central government accounted for most of the borrowing in the FY to September 2026. Higher receipts marginally offset increases in expenditure, resulting in slightly less borrowing than in the same period a year earlier.

Central government current budget deficit

The central government current budget deficit was £53.1 billion in the FY to September 2026. This was £3.8 billion less than in the FY to September 2025 but £1.2 billion above the OBR forecast.

The deficit for the FY to September 2026 reflects the gap between £554.3 billion in current receipts and £584.1 billion in current spending, after accounting for £23.2 billion of depreciation.

Central government net investment

Central government net investment was £49.6 billion in the FY to September 2026, £3.1 billion more than in the same period last year.

This included an £8.2 billion payment to the Bank of England Asset Purchase Facility Fund, £0.7 billion more than in the FY to September 2025. These payments are recorded as both central government net investment expenditure and Bank of England receipts, so they have no effect on overall public sector borrowing.

Other increases included higher gross capital formation and higher capital payments to other sectors. Some capital payments, such as those made to local authorities, are public sector borrowing neutral because they are recorded as both central government expenditure and local government income.

Local government and public corporations' borrowing

Initial estimates show that local government borrowed £0.6 billion in the FY to September 2026, £0.8 billion less than in the same period a year earlier. Over the same period, non-financial public corporations recorded a surplus of £0.2 billion, a £1.1 billion smaller surplus than a year earlier.

Data for local government in the current FY are provisional and are currently based on budget data for England, Scotland and Wales, with estimates included for Northern Ireland. Data for non-financial public corporations are highly provisional and largely based on the OBR's Economic and fiscal outlook – March 2026 report. Further information is provided in Section 10: Data sources and quality.

Bank of England

Initial estimates show that the Bank of England recorded a surplus of £3.9 billion in the FY to September 2026, £3.1 billion higher than in the same period a year earlier. The increase in the surplus mainly reflects lower interest payable to the private sector and the rest of the world.

Data for the Bank of England are currently provisional and based on a combination of published monthly data, available with a one-month lag, and forecasts derived from the latest Bank of England Annual Report and Accounts.

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

Public sector borrowing was £6.0 billion above the OBR forecast in the FY to September 2026, largely because of higher-than-forecast borrowing by central government and public corporations.

Central government receipts were £5.8 billion above forecast, mainly reflecting higher-than-expected Corporation Tax (£5.3 billion), compulsory social contribution – largely National Insurance contributions (£3.3 billion) – and Income Tax (£2.9 billion) receipts, partly offset by lower-than-expected Stamp Duties (£1.5 billion), Value Added Tax (£0.9 billion), and in several smaller receipt categories.

Central government expenditure was £8.9 billion above forecast, with debt interest payable £3.8 billion higher and net social benefit payments, including pensions, £2.5 billion higher.

Public corporations' data remain largely based on ONS estimates and will be updated as more information becomes available.

Expressing borrowing as a share of gross domestic product (GDP) provides context for the scale of borrowing relative to the size of the economy and supports comparisons over time. 

The public sector borrowed £134.2 billion in the financial year ending March 2026, equivalent to 4.4% of GDP. This was broadly in line with the Office for Budget Responsibility's forecast of 4.3% of GDP and continued the pattern of borrowing in recent years.

Borrowing in the financial year to September 2026 was 3.1% of GDP. This was 0.3 percentage points lower than in the same period a year earlier, and the 10th- highest April to September period since comparable monthly records began in 1993.

Borrowing measures the flow of public sector finances over a period. Debt and other balance sheet measures provide a snapshot of the public sector's financial position at a point in time, showing its liabilities and assets.

There are several measures of the public sector balance sheet. The relationship between them is summarised in Table 9 and is discussed in our What the UK government owns and what it owes blog.

As a part of its quantitative easing activities, the Bank of England (BoE) 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 were subsequently loaned to the APF to purchase these gilts. They remain on the public sector balance sheet as a liability in currency and deposits until the loan is repaid.

We publish an additional presentation of the UK public sector balance sheet in our International Monetary Fund's Government Finance Statistics framework in the public sector finances: Appendix E dataset.

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 public sector net debt-to-GDP ratio at the end of September 2026 was provisionally estimated at 94.0%. This was 0.7 percentage points lower than a year earlier and 1.2 percentage points below the Office for Budget Responsibility's (OBR) forecast.

The reduction in debt-to-GDP ratio reflects current price GDP growing faster than public sector net debt, both compared with September 2025 and relative to the OBR's forecast.

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.

Our Public sector balance sheet tables: Appendix N dataset presents a detailed reconciliation between the balance sheet measures summarised in Table 9.

Public sector net financial liabilities

Public sector net financial liabilities (PSNFL) is broader than public sector net debt (PSND) because it includes additional financial assets and liabilities.

PSNFL was 82.7% of GDP at the end of September 2026; this was 0.7 percentage points higher than at the end of September 2025.

These extra financial assets are currently valued at more than the extra financial liabilities, meaning that PSNFL was 11.3 percentage points of GDP less than PSND at the end of September 2026.

We explain the financial assets and liabilities captured in PSNFL in our PSNFL methodology.

Additionally, we published our 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 22 September 2026 and will next be updated on 22 December 2026.

A detailed presentation of PSNFL is available in our PSNFL by subsector: Appendix G dataset, consistent with the 22 September 2026 public sector finances dataset.

The UK government has legislated for fiscal targets to constrain its management of the public finances. From January 2025, these fiscal targets focus on the public sector current budget deficit and public sector net financial liabilities (PSNFL).

The targets are for the current budget to be in surplus and for PSNFL to fall as a share of gross domestic product (GDP) by the financial year ending (FYE) March 2030. Our latest figures show that:

• the public sector current budget deficit was £47.3 billion in the FYE March 2026; this was £25.9 billion less than in the FYE March 2025

• PSNFL were initially estimated at 81.4% of GDP at the end of March 2026; this was 1.6 percentage points more than at the end of March 2025

The latest estimates include some data that are initially based on forecasts. As more information becomes available, these estimates are replaced with improved estimates and, later, with outturn data.

Revisions to public sector net borrowing

Public sector finance estimates are revised as improved and more complete source data become available. Revisions are a normal part of the statistical production process and help ensure that published estimates provide the most accurate picture of the public sector's finances.

Since publishing our Public sector finances, UK: August 2026 bulletin, we have reduced our estimate of public sector net borrowing for the financial year (FY) to August 2026 by £4.0 billion, from £77.3 billion to £73.3 billion. The £4.0 billion revision represents 5.1% of the previously published estimate for the FY to August 2026.

Of the £4.0 billion downward revision to borrowing in the FY to August 2026, £4.1 billion relates to central government. This reflects a £3.5 billion increase to our previous estimate of tax receipts, alongside a £0.7 billion decrease in estimated central government expenditure following routine monthly data updates.

This central government revision was partially offset by a £0.2 billion increase in our previous estimate of local government borrowing, reflecting lower estimated grants from central government to local authorities.

More detail on revisions to public sector borrowing is available in the Public sector finances summary tables: Appendix M dataset.

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

Since publishing our Public sector finances, UK: August 2026 bulletin, we have reduced our estimate of public sector net debt at the end of August 2026 by £4.4 billion (0.1%) to £2,981.2 billion.

This is largely because of updated Bank of England (BoE) data. Revisions of this magnitude are not uncommon, as some underlying BoE data are reported with a one-month lag.

Local government quality adjustments

In recent years, local authority budgets have not always reflected the expenditure reported in final audited accounts. In particular, budget data have tended to underestimate current expenditure.

To improve the quality of our estimates and to reduce the likelihood of unnecessary revisions, we apply adjustments where appropriate to better align budget-based estimates with expected outturns.

For the financial year ending (FYE) March 2027, these adjustments include:

• a £4.0 billion upward adjustment to England's current expenditure

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

For the FYE March 2026, these adjustments include:

• a £5.0 billion upward adjustment to England's current expenditure

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

To reflect the latest available information on housing benefit expenditure, we have also applied downward adjustments of £2.7 billion in the FYE March 2026 and £2.3 billion in the FYE March 2027.

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

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

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

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 the costs of day-to-day public services, welfare and administration, 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.

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 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 (sometimes referred to as 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

International reporting standards

All aggregates in this bulletin are reported in accordance with the 2010 European system of national and regional accounts (ESA 2010) (PDF, 6.4MB), unless otherwise stated.

Statistical designation

The Office for Statistics Regulation (OSR) independently reviewed the public sector net borrowing, cash requirement, and debt statistics in July 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 July 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 non-financial assets data estimated by the ONS when compiling the National Balance Sheet statistics.

HM Revenue and Customs data quality review

On 8 October 2025, HM Revenue and Customs (HMRC) reported an underestimation in its Value Added Tax (VAT) cash receipts data for the period April to September 2025.

HMRC implemented immediate improvements to quality assurance processes, including comparisons with independent data sources, working with HM Treasury and the ONS. HMRC carried 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. The HMRC statistics review 2026 was published on 15 September 2026. We are working with HMRC and HM Treasury to support the implementation of its recommendations.

We have reported progress on work to improve the quality of public sector finance statistics in the fourth quarterly update on the Economic Statistics Plan in our surveys and economic statistics improvement plan, quarterly progress update: October 2026.

Local government data quality

Local government estimates for the financial year ending (FYE) March 2027 remain provisional. They are primarily based on quality-adjusted local authority budget data for England, Scotland and Wales, alongside estimates for Northern Ireland.

For FYE March 2026, estimates of current expenditure also remain provisional and continue to rely largely on quality-adjusted local authority budget data for England, Scotland and Wales. Estimates of capital expenditure and receipts for England have been updated using provisional outturn data, while estimates for Scotland and Wales continue to be based on budget data. Figures for Northern Ireland remain estimated.

For FYE March 2025, estimates of current expenditure for local authorities in England are based on published third-release outturn data, while estimates of capital expenditure and receipts are based on published final outturn data. Estimates for Scotland and Wales are based on published outturn data, and those for Northern Ireland are based on final returned data.

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