Public sector finances, UK: February 2026

• Borrowing: the difference between total public sector spending and income was £14.3 billion in February 2026; this was £2.2 billion more than in February 2025, largely because of the timing of central government debt interest payable (see Figure 2), and the second highest February borrowing since monthly records began in 1993, behind that of 2021.

• Borrowing in the financial year to February 2026 was £125.9 billion; this was £11.9 billion or 8.7% less than in the same 11-month period a year ago, but still the fourth-highest April to February borrowing on record (not adjusted for inflation).

• Borrowing in the financial year to February 2026 was provisionally estimated at 4.1% of gross domestic product (GDP); this was 0.6 percentage points less than in the same 11-month period a year ago.

• The current budget deficit (borrowing to fund day-to-day public sector activities) was £5.1 billion in February 2026; this brings the total current budget deficit in the financial year to February 2026, to £62.1 billion, which is £16.7 billion, or 21.1% less than in the same 11-month period a year ago.

• Public sector net debt excluding public sector banks (a measure of the amount of money owed to the UK private sector and overseas less any liquid assets held) was provisionally estimated at 93.1% of GDP at the end of February 2026 and remains at levels last seen in the early 1960s.

• Public sector net financial liabilities excluding public sector banks (which considers a wider range of financial assets and liabilities than net debt) were provisionally estimated at 82.5% of GDP at the end of February 2026, 10.6 percentage points less than for public sector net debt.

• Central government net cash requirement (excluding UK Asset Resolution Ltd and Network Rail Ltd) – the additional cash needed to be raised from the financial markets to finance activities – was £9.1 billion in February 2026; this was a £0.6 billion more than in February 2025.

Initial estimates show that the public sector borrowed £14.3 billion in February 2026, £2.2 billion higher than in February 2025, and £6.9 billion above the Office for Budget Responsibility’s forecast of £7.4 billion published in November 2025.

Our Public sector finances borrowing by subsector: Appendix R dataset provides further detail on data presented in Table 1 and the option to select other time periods.

Central government borrowing

Central government forms the largest part of the public sector and includes government departments such as HM Revenue and Customs, the Department of Health and Social Care, the Department for Work and Pensions, the Department for Education, the Ministry of Defence, and other government agencies.

The relationship between central government's receipts and expenditure is an important determinant of public sector net borrowing. Of the £14.3 billion that the public sector borrowed in February 2026, central government borrowing was £9.5 billion.

Central government receipts

Central government's receipts were £95.1 billion in February 2026, which is £8.1 billion or 9.3% more than in February 2025. Of this £8.1 billion increase in income:

• central government tax receipts increased by £5.5 billion to £71.5 billion; this included increases of £4.5 billion in Income Tax receipts (including PAYE and self-assessed Income Tax), £0.6 billion in Corporation Tax receipts, and £0.2 billion in Value Added Tax (VAT) receipts

• compulsory social contributions increased by £2.6 billion to £17.9 billion, as changes to the rate of National Insurance contributions paid by employers came into effect on 6 April 2025

A detailed breakdown of central government income is presented in our Public sector current receipts: Appendix D dataset.

The forecasts underlying our current tax estimates reflect the expectations published in the Economic and fiscal outlook - November 2025 report from the Office for Budget Responsibility (OBR).

Self-assessed tax receipts 

Tax payments made close to the deadline of 31 January each year, and the time taken for those to then appear in administrative data, mean that the proportion of self-assessed (SA) taxes recorded in January and February can vary year-on-year. Therefore, it is advisable to consider these two months together when making annual comparisons. 

• SA Income Tax receipts in February 2026 increased by £1.3 billion to £4.5 billion compared with a year earlier; this brings the total for January and February 2026 to £34.0 billion, which is £4.8 billion more than in the same two months in 2025 

• SA Capital Gains Tax receipts in February 2026 increased by £1.3 billion to £2.7 billion compared with a year earlier; this brings the total for January and February 2026 to £19.7 billion, which is £8.3 billion more than in the same two months in 2025

Central government current expenditure

Central government spending data for February 2026 are provisional. There is uncertainty around these estimates until more detailed departmental information becomes available over time.

Central government's current expenditure (spending to fund its day-to-day activities) was provisionally estimated as £92.2 billion in February 2026, which is £8.0 billion, or 9.6%, more than in February 2025. Of this £8.0 billion increase in spending:

• central government debt interest payable increased by £5.5 billion to £13.0 billion, with movements in the Retail Prices Index (RPI) adding volatility to the monthly debt interest costs

• central government departmental spending on goods and services increased by £1.4 billion to £38.7 billion, as pay rises and inflation increased running costs

• net social benefits paid by central government increased by £1.4 billion to £25.5 billion; this was largely caused by inflation-linked increases in many benefits and earnings-linked increases to state pension payments

• payments to support the day-to-day running of local government increased by £0.4 billion to £10.7 billion; these intra-government transfers are both central government spending and a local government receipt, so they have no effect on overall public sector borrowing 

• current grants paid to the rest of the world decreased by £0.6 billion to £0.5 billion, reflecting both a reduction in payments to the EU and a change in the monthly pattern of ongoing payments

Central government debt interest costs

Borrowing is largely financed by the issuance of central government gilts by the Debt Management Office, on which interest is paid to investors.

Central government debt interest payable in February 2026 was £13.0 billion, £5.5 billion more than in February last year.

The interest payable on index-linked gilts rises and falls with the RPI, adding volatility to central government debt interest costs. This additional RPI inflation-linked component of interest is described as "capital uplift" and affects the value of the gilt principal.

In February 2026, the capital uplift increased the total central government interest payable by £4.8 billion. This largely reflects the 0.7% increase in the RPI between November and December 2025.

Last month, interest coupon payments due on 30 January 2026 were settled on 2 February 2026 because of the intervening weekend. Consequently, underlying central government debt interest was reduced by £2.0 billion in January and increased by £2.0 billion in February. This is illustrated in the dark blue portion of stacked bar in Figure 2 for February and January 2026.

Capital uplift is accrued throughout the life of each index-linked gilt but is paid to gilt holders as interest at redemption. Accrued capital uplift is shown as the light blue portion of each stacked bar in Figure 2.

Central government net investment 

Central government net investment was £8.8 billion in February 2026, £3.3 billion more than in February 2025. This increase was largely because of a £1.9 billion increase in gross capital formation and a £1.1 billion increase in capital transfers paid to the private sector.

Comparing our February 2026 borrowing estimates with official forecasts

The OBR is responsible for the production of official forecasts for the UK government. These forecasts are usually produced twice a year, in spring and autumn.

The OBR published its Economic and fiscal outlook - March 2026 report on 3 March 2026. However, unless noted the forecasts used for comparison and that underpin our estimates are based on its Economic and fiscal outlook - November 2025 report. This is because there are no monthly profiles published for the current financial year to accompany the March 2026 forecasts.

In February 2026, borrowing was £6.9 billion higher than (or almost double) forecast, mainly because central government spending was higher than anticipated.

The public sector spent more than it received in taxes and other income in the financial year (FY) to February 2026.

Provisional estimates show borrowing is £125.9 billion over the 11-month period. This is £11.9 billion, or 8.7% less than in the FY to February 2025, and £1.9 billion less than the £127.8 billion forecast by the Office for Budget Responsibility (OBR), published in November 2025.

Our Public sector finances borrowing by subsector: Appendix R dataset provides further detail on data presented in Table 1 and the option to select other time periods.

Central government net borrowing

Central government forms the largest part of the public sector, and the relationship between its receipts and expenditure is an important determinant of public sector net borrowing. Of the £125.9 billion borrowed by the public sector in the FY to February 2026, central government borrowed £118.3 billion.

Central government receipts

Central government's receipts were £1,016.7 billion in the FY to February 2026, which is £79.0 billion or 8.4% more than in the same 11-month period a year ago. Of this £79.0 billion increase in income:

• central government tax receipts increased by £50.9 billion to £769.4 billion; this included increases of £32.7 billion in Income Tax, £7.6 billion in Value Added Tax (VAT), and £4.3 billion in Corporation Tax receipts

• compulsory social contributions increased by £28.8 billion to £184.5 billion, as changes to the rate of National Insurance contributions paid by employers came into effect on 6 April 2025

A detailed breakdown of central government income is presented in our Public sector current receipts: Appendix D dataset.

Central government current expenditure

Central government's current expenditure (spending to fund its day-to-day activities) was provisionally estimated at £1,006.6 billion in the FY to February 2026, which is £65.2 billion or 6.9% more than in the same 11-month period a year ago. Of this £65.2 billion increase in spending:

• central government departmental spending on goods and services increased by £27.2 billion to £422.5 billion, as pay rises and inflation increased running costs

• net social benefits paid by central government increased by £20.0 billion to £300.4 billion, largely caused by inflation-linked increases in many benefits (including Universal Credit), and earnings-linked increases to state pension payments

• interest payable on central government debt increased by £13.5 billion to £94.4 billion, largely because the interest payable on index-linked gilts rises and falls with the Retail Prices Index

• payments to support the day-to-day running of local government increased by £2.5 billion to £134.0 billion; these intra-government transfers have no impact on overall public sector borrowing

Central government net investment

Central government net investment was £88.7 billion in the FY to February 2026, which is £10.5 billion less than in the same 11-month period a year ago. Over this period, central government made payments totalling £16.7 billion to the Bank of England (BoE) Asset Purchase Facility Fund, which is £19.7 billion less than in the same 11-month period of 2024. These payments are recorded as both central government net investment expenditure and BoE receipts, so have no impact on overall public sector borrowing.

Local government borrowing

Initial estimates show that local government net borrowing was £16.1 billion in the FY to February 2026. This was £0.7 billion less than in the same 11-month period a year ago.

Local government data for the financial year to February 2026 are provisional estimates for the UK. They are largely based on budget data for England, Scotland, and Wales, with estimates included for Northern Ireland. Further information on the quality of our local government data is discussed in Section 11: Data sources and quality.

Public corporations' borrowing

Initial estimates show that overall, public corporations were in surplus by £1.6 billion in the FY to February 2026. This was a surplus equivalent to that of the same 11-month period a year ago.

Borrowing figures for public corporations in the current financial year are highly provisional and primarily based on the OBR's Economic and fiscal outlook - November 2025 report.

Estimates for FYE March 2025 use the Economic and fiscal outlook - October 2024 report, supplemented by in-year data for train operating companies, the Housing Revenue Account, and surveyed public corporations.

Comparing our financial year to February 2026 estimates with official forecasts

Financial year-to-date comparisons offer a more reliable view of overall trends, while monthly figures can be more prone to short-term forecast volatility.

In the financial year to February 2026, borrowing was £1.9 billion lower than forecast in November 2025, largely because local government borrowing was lower than expected.

Provisional estimates show the public sector borrowed £151.8 billion in the financial year ending (FYE) March 2025. This was the third-highest amount borrowed in any financial year since records began in FYE March 1947. However, these estimates have not been adjusted for inflation.

Expressing borrowing as a ratio of gross domestic product (GDP) (the value of everything produced in the UK economy in a 12-month period) gives an estimate of its affordability and is recommended for comparison of the UK’s fiscal position over time.

In the financial year to February 2026, borrowing has been provisionally estimated at 4.1% of GDP. This was 0.6 percentage points less than during the same 11-month period a year ago and was the fifteenth-highest borrowing ratio in any April to February period since monthly records began in 1993.

In March 2026, the Office for Budget Responsibility forecast that borrowing will reach 4.3% of GDP in the financial year to March 2026. This is 0.2 percentage points less than forecast in November 2025.

The public sector balance sheet describes its financial position at a point in time. It shows its liabilities and assets. There are several measures of the public sector balance sheet that we discuss in our What the UK government owns and what it owes blog.

As a part of the quantitative easing activities of the Bank of England (BoE), it purchased central government gilts from the market through the Asset Purchase Facility (APF) fund. These gilt holdings consolidate within the public sector balance sheet, leaving only the difference between their purchase price and their redemption value. 

Subsequent movements in the market value of these consolidated gilt holdings have no impact on the public sector balance sheet.

The reserves created by the BoE and subsequently loaned to the APF to purchase these gilts remain on the public sector balance sheet as a liability in currency and deposits until the loan is repaid.

Our Public sector balance sheet tables: Appendix N dataset presents a detailed reconciliation between the balance sheet measures summarised in Table 5.

Public sector net debt

Public sector net debt is a widely quoted balance sheet measure. Expressing net debt as a ratio of gross domestic product (GDP) gives an estimate of its affordability and provides a more consistent measure for comparison of the UK's fiscal position over time.

The net debt-to-GDP ratio at the end of February 2026 was provisionally estimated at 93.1%, which is 0.2 percentage points less than 12 months ago and 1.8 percentage points less than forecast by the Office for Budget Responsibility in November 2025.

Our How the ONS estimates UK debt to GDP figures blog explains why our estimates of the debt to GDP ratio are susceptible to revision.

Public sector net financial liabilities

Public sector net financial liabilities (PSNFL) were 82.5% of GDP at the end of February 2026, 1.6 percentage points more than at the end of February 2025.

The PSNFL measure has a broader scope than debt (PSND). It adds further financial assets and financial liabilities to those recorded in PSND.

These extra financial assets are currently valued at more than the extra financial liabilities. This means that at 82.5% of GDP, PSNFL was 10.6 percentage points of GDP less than PSND at the end of February 2026.

We explain the financial assets and liabilities captured in PSNFL in our Public sector net financial liabilities (PSNFL) methodology.

Additionally, we published a blog explaining the PSNFL measure, because it has been selected by the UK government as the reference for a balance sheet fiscal rule.

The additional financial assets and liabilities included in PSNFL that fall outside of the PSND boundary are not updated monthly. Instead, they are updated quarterly, or when data become available. These data were last updated on 20 March 2026 and will next be updated on 19 June 2026.

A more detailed presentation of the public sector balance sheet is available in our Public sector net worth: Appendix O dataset, released on 20 March 2026.

The UK government has legislated for fiscal targets to constrain its management of the public finances. The Autumn Budget 2024 announced that from January 2025, these fiscal targets focus on the public sector current budget deficit and public sector net financial liabilities. 

The targets are that by the end of the financial year ending (FYE) 2030, the current budget should be brought into surplus, and that public sector financial liabilities should be falling relative to the size of the economy (or gross domestic product - GDP) compared with the previous year. 

Our latest figures show that:

• the public sector current budget deficit was £76.0 billion in the FYE March 2025; this was £9.1 billion more than in the FYE March 2024

• public sector net financial liabilities were provisionally estimated at 81.0% of GDP at the end of March 2025; this was 1.5 percentage points more than at the end of March 2024

The data for the latest months of every release contain a degree of forecasts. These are then replaced by improved estimates, as further data are made available, and finally by outturn data.

Our Public sector finance revisions analysis: Appendix P dataset records monthly borrowing data, as at first and at subsequent publications, graphically illustrating any potential bias to our early estimates.

Notable updates in March 2026

Some of the data used to compile monthly public sector finance statistics are sourced quarterly from the wider national accounts.

This month we have updated our local government and public corporations' estimates with the most recent data available and implemented the reclassification of British Steel Limited from the private sector to the public corporation subsector.

Implementation of British Steel Limited into UK public sector finance statistics

This month we have implemented the reclassification of British Steel Limited from the private sector to the public non-financial corporation subsector for statistical purposes. This change is effective from April 2025. Please refer to our article Economic statistics classifications and developments in public sector finances: February 2026 for further information.

Regular updates for local government

We have updated our previous local government estimates with recently published data this month. These updates include:

• Scottish Government Local Government Finance Statistics for the financial year ending March 2025

• updated outturn revenue expenditure and financing data for England in the financial year ending March 2025 published by the Ministry of Housing, Communities and Local Government (MHCLG)

• The Quarterly Revenue Update data for England (October to December 2025) published by MHCLG have been used to inform our adjustments applied to current expenditure for the financial year ending March 2026

• The Capital Payments and Receipts data for England (covering the financial year to December 2025) published by MHCLG have been used to provide a quarterly path for the capital expenditure data

• updated Northern Ireland revenue data for the financial year ending March 2025

• updated financial accounts for England published by MHCLG for the financial year to December 2025

Regular updates for public corporations

We have updated our previous public corporations estimates with recently published data this month. These updates include:

• updated public corporations survey data (covering October to December 2025)

• the inclusion of Whole of Government Accounts (WGA) data for the financial years ending March 2023 and March 2024

Revisions to public sector net borrowing in the financial year to January 2026

Since publishing our Public sector finances, UK: January 2026 bulletin, we have reduced our estimate of public sector net borrowing (PSNB ex) in the first 10 months of the financial year by £0.5 billion to £111.5 billion.

Of this change, a reduction of £2.2 billion to our previous estimate of central government net borrowing was partially offset by a £1.8 billion increase in our previous estimate of public corporations' net borrowing.

Regular monthly updates to our estimates of central government receipts data largely offset each other over the 10-month period, with an overall reduction of £0.3 billion to our previous estimate. Over the same period, our provisional estimate of spending has reduced by £2.6 billion, largely because of a reduction of £1.1 billion to our previous estimate of spending on goods and services and a reduction of £1.3 billion to our previous estimate of capital investment.

A reduction of £1.7 billion to our previous estimate on public corporations' revenue has increased our previous estimate of their overall net borrowing by £1.8 billion. These changes are largely because of regular quarterly updates to our dataset, with the inclusion of British Steel Limited having negligible impact on our borrowing estimates.

Revisions to public sector net borrowing in the financial year ending March 2025

We have reduced our estimate of borrowing in FYE March 2025 by £1.0 billion to £151.8 billion.

This reduction was because of updated source data, with regular monthly and quarterly updates reducing our previous estimate of central government borrowing by £0.5 billion and regular quarterly updates reducing our previous estimate of local borrowing by £0.7 billion.

These changes were partially offset by regular updates to our public corporations' data, increasing our previous estimate of public corporations' net borrowing by £0.2 billion.

Revisions to public sector net debt at the end of January 2026

We have increased our estimate of public sector net debt at the end of January 2026 by £3.8 billion to £2,871.2 billion. Of this, we have increased our previous estimate of the Bank of England's contribution to debt by £2.3 billion. Some of the data used to compile this estimate are published one month in arrears, so large revisions are not uncommon.

The remaining revisions are largely because of regular quarterly updates to our central government, local government, and public corporations data. The inclusion of British Steel Limited added around £0.6 billion to public corporations' net debt, and subsequently public sector net debt at the end of January 2026.

Revisions to public sector net financial liabilities at the end of January 2026

We have reduced our estimate of public sector net financial liabilities (PSNFL) at the end of January 2026 by £2.7 billion to £2,541.8 billion.

In addition to increasing our previous estimate of public sector net debt by £3.8 billion, we increased our estimate of the other public sector financial liabilities that fall outside of the net debt boundary by £7.4 billion. However, these increased liabilities were more than offset by a 13.9 billion increase to our previous estimate of public sector financial assets, that again fall outside of the net debt boundary.

This month's inclusion of British Steel Limited in the public sector finance statistics added £1.0 billion to our estimate of PSNFL at the end of January 2026, and as such its impact was offset with other changes to public sector assets and liabilities.

The additional financial assets and liabilities included in PSNFL that fall outside of the PSND boundary are not updated monthly. Instead, they are updated quarterly, or when data become available. This release includes our latest estimates published alongside this bulletin in our Public sector balance sheet tables: Appendix N dataset.

Revisions to gross domestic product

This month we have updated our previous estimates of nominal gross domestic product (GDP) with those published in the Office for Budget Responsibility's Economic and fiscal outlook - March 2026.

Combined with our £3.8 billion increase in our estimate of net debt at the end of January 2026, this GDP update increased our corresponding estimate of net debt expressed as a ratio of GDP by 0.2 percentage points, from 92.9% to 93.1%.

Public sector

The UK public sector comprises of six subsectors: central government, local government, public nonfinancial corporations, public sector-funded pensions, the Bank of England, and public financial corporations.

Figures in this release exclude public sector banks, following the reclassification of NatWest Group to the private sector in June 2024.

Public sector net borrowing

Public sector net borrowing (often referred to as the deficit) is the difference between total expenditure and receipts. Positive numbers indicate a deficit, while negative numbers indicate a surplus.

Public sector current budget deficit

Public sector current budget deficit is the difference between current expenditure and receipts, after accounting for depreciation. It measures the borrowing needed to fund day-to-day activities and is the reference statistic for a UK government fiscal rule. Positive numbers indicate a deficit, while negative numbers indicate a surplus.

Both current budget deficit and borrowing are recorded on an accrual basis, that is income when earned and spending when incurred, rather than when cash is paid.

Central government net cash requirement

The central government net cash requirement is the cash the government must raise from financial markets to finance its activities. It reflects the timing of payments and receipts rather than when liabilities arise.

Public sector net debt

Public sector net debt (often referred to as the national debt) measures the public sector's liabilities to the private sector and overseas, net of its liquid financial assets.

Public sector net financial liabilities

Public sector net financial liabilities (often referred to as PSNFL or net financial debt) is a broader balance sheet measure than net debt, capturing all financial assets and liabilities recognised in the national accounts.

PSNFL is the reference statistic for a UK government fiscal rule.

Public sector net worth

Adding non‑financial assets to PSNFL results in public sector net worth, the widest measure of the public sector balance sheet.

About the statistics

About our data sources

HM Revenue and Customs data quality review

On 8 October 2025, HM Revenue and Customs (HMRC) reported an under-estimation in its VAT cash receipts data for the period April to August 2025. HMRC has implemented immediate improvements to quality assurance processes, including comparisons with independent data sources, working with HM Treasury and the Office for National Statistics (ONS). HMRC will also carry out a robust review across all receipts to consider the underlying issue and to identify actions to minimise the risk of similar incidents in future.

We are working with HM Treasury to support this process. The Office for Statistics Regulation will provide an independent perspective on HMRC's review to ensure compliance with the Code of Practice for Statistics.

We reported on progress with work to improve the quality of public sector finance statistics as part of the first quarterly update on the Economic Statistics Plan in our ONS strategic improvement update: December 2025, published on 4 December 2025.

We discuss our plans to deliver further improvements to the quality of our core statistics in our Driving Forward: Our Plans for 2026 and Beyond blog published on 12 January 2026.

Local government data quality

Local government data for the financial year ending (FYE) March 2026 are provisional estimates for the UK. They are largely based on budget data for England, Scotland, and Wales, and with estimates included for Northern Ireland.

For FYE March 2025, estimates of the current expenditure of local authorities in England are based on published second release data, while capital expenditure and receipts are based on published final outturn data.

Estimates for the devolved administrations for FYE March 2025 are based on published outturn data for Wales and Scotland, and final returned data for Northern Ireland.

In recent years, planned local government expenditure initially reported in local authority budgets has been systematically lower than final outturn current expenditure reported in the audited accounts. However, it has been generally higher than that reported in final outturn capital expenditure. Therefore, we may include adjustments to increase or decrease the amounts reported at the budget stage.

For FYE March 2026, these adjustments include:

• a £2.0 billion upward adjustment to England's current expenditure

• a £0.5 billion upward adjustment to England's capital expenditure

• a £2.4 billion upward adjustment to Scotland's current expenditure

To reflect the most recently available data for housing benefits, we have applied a further £3.0 billion downward adjustment to current expenditure in the FYE March 2026. 

Statistical designation

The Office for Statistics Regulation (OSR) independently reviewed the public sector net borrowing, cash requirement, and debt statistics in June 2017, concluding that they comply with the standards of trustworthiness, quality, and value in the Code of Practice for Statistics, and should be labelled "accredited official statistics". 

The public sector net financial liabilities and public sector net financial worth statistics are both official statistics. These measures were introduced after June 2017, so have not yet been reviewed by the OSR.

The public sector net worth statistics are labelled as "official statistics in development". They are based on information from public sector finance and data from ONS' non-financial accounts.