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GB: Public Sector Finances
| Actual | Previous | Revised | |
| Public Sector Net Borrowing | £1.8B | £16.0B | £12.8B |
| Ex-Public Sector Banks | £1.8B | £16.0B | £12.8B |
Highlights
UK public finances showed that in July 2026, monthly borrowing reached £1.88 billion, £0.7 billion higher than a year earlier and £2.3 billion above the Office for Budget Responsibility’s forecast. This deterioration occurred despite self-assessed income tax receipts rising to £17.1 billion, indicating that expenditure growth outpaced revenue gains.
The cumulative position was comparatively stronger as borrowing of £56.7 billion between April and July was 9.6 percent lower than a year earlier, although still £2.3 billion above forecast. At 1.8 percent of GDP, borrowing was also 0.3 percentage points lower, suggesting some improvement in fiscal flows.
Nevertheless, balance-sheet pressures remained substantial. Net debt increased by £95.9 billion to almost £3 trillion, although its ratio to GDP declined to 94.1 percent. Conversely, wider net financial liabilities rose to 83.7 percent of GDP. In summary, stronger revenues and lower cumulative borrowing indicate gradual fiscal improvement, but persistent forecast overruns, rising liabilities and historically elevated debt continue to restrict the government’s fiscal flexibility.
Definition
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.
Description
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.