UK August borrowing overshoots forecasts, squeezing Healey's budget plans

Britain's government borrowed more than economists had anticipated in August, official figures showed on Tuesday, leaving the public finances further adrift of official forecasts and complicating the backdrop for finance minister John Healey's first budget.

The Office for National Statistics reported public sector net borrowing of £18.3 billion ($24.5 billion) for August. That was above every forecast in a poll of economists, which had pointed to a deficit of £15.5 billion.

The overshoot was compounded by upward revisions to borrowing in each of the previous four months of the 2026/27 financial year. The cumulative deficit for April to August now stands at £77.3 billion.

While that total is £2.2 billion lower than at the same point in 2025/26, it is £8.1 billion higher than the Office for Budget Responsibility had projected for this stage of the year. The OBR's forecasts underpin Healey's tax and spending plans.

An ONS statistician said tax receipts had looked strong, but this had been offset by rising government spending on goods and services and on welfare benefits linked to inflation.

The current budget deficit — the gap between day-to-day spending and tax revenue, which the government must balance by 2029/30 — stood at £51.9 billion in the year to date. That too exceeded the OBR's forecast of £47.1 billion at this point in the year.

The figures land as Healey prepares to set out his first budget against a fiscal backdrop that has grown more difficult than official projections had assumed.