21st Oct 2025 07:15
(Alliance News) - UK government borrowing rose in September to its highest level for that month in five years, as higher debt interest payments and increased departmental spending continued to weigh on the public finances, figures from the Office for National Statistics showed Tuesday.
Public sector net borrowing, excluding public sector banks, stood at GBP20.2 billion in September, up GBP1.6 billion, or 8.6%, from a year earlier. This marked the highest September borrowing since 2020, the ONS said.
The figure, however, came below the FXStreet-cited consensus of GBP20.5 billion, but was slightly above the Office for Budget Responsibility's March forecast of GBP20.1 billion.
For the financial year to September, borrowing totalled GBP99.8 billion, up GBP11.5 billion, or 13%, from the same period last year and the second-highest April-to-September total since monthly records began in 1993.
The current budget deficit, which covers day-to-day spending, rose 21% on the year to GBP13.4 billion in September. Debt interest costs jumped GBP3.8 billion to GBP9.7 billion, as inflation-linked gilt payments were pushed up by movements in the Retail Prices Index.
Central government spending increased GBP8.1 billion, or 9.8%, to GBP90.6 billion, reflecting higher pay and inflation-related costs, as well as increases in benefit and pension payments.
Tax receipts rose GBP3.6 billion to GBP63.1 billion, led by gains in income tax, value-added tax and corporation tax, while social contributions grew GBP3.2 billion following April's rise in employer National Insurance rates.
Public sector net debt, excluding public sector banks, was provisionally estimated at 95.3% of gross domestic product at the end of September, up one percentage point from a year earlier and remaining near levels last seen in the early 1960s.
The central government net cash requirement, a measure of the cash needed to cover deficits, was GBP15.9 billion in September, nearly 20% higher than a year before.
The ONS noted that this month's figures included a revision to VAT receipts following a correction announced by HM Revenue & Customs on October 8.
By Eva Castanedo, Alliance News reporter
Comments and questions to [email protected]
Copyright 2025 Alliance News Ltd. All Rights Reserved.