The latest public finance figures for October 2025 showed that monthly borrowing fell to £17.4 billion, almost 10 percent lower than the previous year, yet it still ranks as the third-highest October level since records began. This shows that while pressures may be easing slightly, overall borrowing remains historically elevated. Across the financial year to date, borrowing reached £116.8 billion, an 8.4 percent increase from the same period in 2024, signalling persistent strain on the public purse and marking the second-highest AprilOctober total on record after 2020's pandemic-driven peak.

Borrowing in the financial year 2025 now stands at an estimated 3.9 percent of GDP, only marginally higher than last year, suggesting that economic growth has helped cushion fiscal deterioration. However, the current budget deficit continues to widen, reaching £83.9 billion so far this year and reflecting rising day-to-day spending needs. Debt remains high at 94.5 percent of GDP, a level not seen since the early 1960s, although it has edged down slightly over the year.

The central government's cash requirement also increased by nearly 10 percent, pointing to continued reliance on cash borrowing. In summary, the figures reveal a fiscal environment that is stabilising slowly but remains structurally fragile. These latest updates take the RPI to minus 47 and the RPI-P to minus 71, meaning that economic activities are now well behind the 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.