The UK's public finances in June 2025 showed that borrowing reached £20.7 billion, £6.6 billion higher than June 2024 and £3.3 billion higher than the revised figures for the previous month, marking the second-highest June borrowing since records began in 1993. The surge in borrowing is compounded by a steep rise in interest payments on government debt, which stood at £16.4 billion due to the impact of inflation on index-linked gilts. This figure is £8.4 billion more than a year earlier and the second-highest June interest payment since 1997.

For the financial year to June 2025, cumulative borrowing hit £57.8 billion, £7.5 billion above the same period in 2024 and the third-highest April-to-June borrowing on record, surpassed only during the pandemic years of 2020 and 2021. The current budget deficit reached £16.3 billion in June and £44.5 billion over the quarter, reflecting persistent structural spending pressures.

Public sector net debt excluding banks now stands at 96.3 percent of GDP, levels not seen since the early 1960s, while net financial liabilities remain at 83.8 percent of GDP. The government's net cash requirement rose to £15.8 billion, underscoring the strain of rising costs and limited fiscal space amidst ongoing economic uncertainty.

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.