UK Borrowing Rises to £24.5bn in September as Debt Interest Climbs

UK government borrowing reached £24.5bn in September 2026, up from £17bn in August, according to the Office for National Statistics (ONS), the agency that publishes the official figures.

Borrowing is the amount the state needs to raise in a month to cover what it spends beyond what it takes in, mainly through taxes. The September figure was £1.9bn above the forecast of the Office for Budget Responsibility (OBR), which produces the government's official economic and fiscal forecasts. The ONS said it was the second-highest September on record, behind September 2020, and was £1.8bn, or 7.7%, higher than a year earlier. Spending growth outpaced the rise in receipts, although strong growth in income-related taxes helped lift receipts.

Central government borrowing, which excludes some parts of the public sector, was £21.2bn in September, £1.5bn more than in the same month a year before.

The cost of paying interest on government debt was the bigger concern in the figures. Debt interest payments reached £10.9bn in September, the highest September figure since records began and only the eighth time the monthly figure has exceeded £10bn. The ONS said bonds whose payments are linked to the Retail Prices Index (RPI), a measure of inflation, added £4bn to those costs. According to The Guardian, higher RPI inflation in 2026, linked to the effect of the Iran war on energy costs, pushed up debt interest.

Total government debt was estimated to have reached £3tn for the first time in September, equal to 94% of gross domestic product (GDP), the total value of the economy. A year earlier the figure was 95%.

The data arrive ahead of the government's budget. John Healey's first budget as chancellor, the finance minister, was scheduled for the Wednesday following 21 October. Healey is widely expected to accept less fiscal headroom than the £24bn that Rachel Reeves had built up at her spring 2026 forecast. Headroom is the margin the government has under its fiscal rules, the limits it sets on borrowing and debt. Healey has said he will stay within those rules.

The ONS cautioned that its early estimates for the most recent months are open to revision. It also described data for public corporations, including the Bank of England and public sector pensions, as highly provisional, and said September central government spending figures are subject to revision.