Public sector borrowing reached £17.8 billion, marking a £10.1 billion rise compared to December 2023 and the highest December borrowing in four years. Similarly, the current budget deficit surged to £10.0 billion, up £7.3 billion from December 2023, indicating escalating day-to-day funding pressures.

Debt servicing costs also soared, with interest on central government debt reaching £8.3 billion, driven largely by retail price index fluctuations. This represents a £3.8 billion increase from December 2023 and is the third-highest December figure since 1997. Cumulatively, borrowing in the financial year to December 2024 amounted to £129.9 billion, £8.9 billion higher year-over-year, making it the second-highest on record.

Public sector net debt excluding banks stood at 97.2 percent of GDP, a level reminiscent of the early 1960s, reflecting a persistent debt burden. Net financial liabilities were estimated at 84.5 percent of GDP, underscoring a significant gap between liabilities and overall debt. Additionally, the central government net cash requirement rose to £19.4 billion, highlighting ongoing fiscal strains.

These trends underscore the mounting fiscal pressures requiring prudent economic management and targeted policy interventions. The latest update leaves the RPI at minus 26 and RPI-P at minus 31. This means that economic activities are lagging behind expectations of the UK economy.

The public sector net borrowing requirement (PSNB) is the difference between the sector's receipts and expenditure and so provides a simple measure of government fiscal policy. In response to the global economic crisis in 2008/09 the UK government introduced a number of measures designed to show the underlying state of public sector finances by omitting temporary distortions caused by financial interventions. It bases its fiscal policy on these measures. To this end, the underlying gauge of government borrowing watched most closely by financial markets is the PSNB-X which takes overall net borrowing (PSNB) but excludes public sector banks.

Changes in public sector finances can be used to determine the thrust of the government's fiscal policy. Generally speaking when the government has a rising deficit (or falling surplus) it is loosening its fiscal stance with a view to boosting economic activity. When its deficit is falling (or surplus rising), fiscal policy is being tightened in order to slow economic growth. However, sometimes changes in government financial positions can be due to factors outside of the government's control and do not signal an explicit shift in policy. This means that great care is needed in interpreting the data.