Public sector finances, UK: July 2025

• Borrowing - the difference between total public sector spending and income - was £1.1 billion in July 2025; this was £2.3 billion less than in July 2024 and the lowest July borrowing for three years.

• Self-assessed (SA) Income Tax receipts in July 2025 were £15.5 billion, £2.7 billion more than in July 2024; however, because of the possibility of delayed July payments, we recommend considering July and August SA Income Tax receipts as a whole when making year-on-year comparisons.

• Borrowing in the financial year to July 2025 was £60.0 billion; this was £6.7 billion more than in the same four-month period of 2024 and the third-highest April to July borrowing since monthly records began, after those of 2020 and 2021.

• The current budget - borrowing to fund day-to-day public sector activities - was in surplus by £3.3 billion in July 2025; this brings the total current budget deficit in the financial year to July 2025 to £42.8 billion, £5.4 billion more than in the same four-month period of 2024.

• Public sector net debt excluding public sector banks was provisionally estimated at 96.1% of gross domestic product (GDP) at the end of July 2025; this was 0.5 percentage points more than at the end of July 2024 and remains at levels last seen in the early 1960s.

• Public sector net financial liabilities excluding public sector banks were provisionally estimated at 83.9% of GDP at the end of July 2025; this was 2.3 percentage points more than at the end of July 2024, but 12.2 percentage points less than for public sector net debt.

• Central government net cash requirement (excluding UK Asset Revolution Ltd and Network Rail) was £6.3 billion in July 2025; this was £22.8 billion less than in July 2024.

Initial estimates show that the public sector spent more than it received in taxes and other income in July 2025, requiring it to borrow £1.1 billion.

This was £2.3 billion less than in July 2024 and £1.1 billion less than the £2.1 billion forecast in March 2025 by the Office for Budget Responsibility (OBR).

Public sector net borrowing is the sum of its current budget deficit and its net investment.

The current budget, which is usually in deficit, can be considered as borrowing to fund day-to-day public sector activities. This is the difference between its current receipts from taxes and other sources and its current expenditure on running public services, grants and administration.

The current budget was in surplus by £3.3 billion in July 2025; this was a £3.2 billion larger surplus than in July 2024.

Public sector net investment comprises acquisitions less disposals of capital assets (gross fixed capital formation), less the depreciation of capital assets, plus capital grants to the private sector, less capital grants from the private sector.

Net investment was estimated at £4.4 billion in July 2025, which was £0.9 billion more than in July 2024.

A breakdown of net borrowing by subsector and a summary of central government receipts and expenditure data are presented in Tables 1 to 3 in our Public sector finances summary tables: Appendix M dataset.

Our Public sector finances borrowing by subsector: Appendix R dataset provides further detail on data presented in Table 1, including transactions related to borrowing by each subsector and their contribution to total public sector borrowing in a matrix table format. The time period presented in the matrix table can be changed using the drop-down box feature.

Central government borrowing

Central government forms the largest part of the public sector and includes government departments such as HM Revenue and Customs (HMRC), 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 £1.1 billion borrowed by the public sector in July 2025, central government borrowed £5.4 billion, with each of the other subsectors showing a surplus.

Central government current receipts

Central government's current receipts were £100.1 billion in July 2025, £8.8 billion more than in July 2024. Of this £8.8 billion increase in income:

• central government tax receipts increased by £6.1 billion to £77.6 billion; this included increases of £4.5 billion in Income Tax, £0.9 billion in Value Added Tax (VAT) and £0.4 billion in Corporation Tax receipts

• compulsory social contributions increased by £2.6 billion to £16.3 billion; on 6 April 2025 changes to the rate of National Insurance contributions paid by employers came into effect

Self-assessed Income Tax

Self-assessed (SA) Income Tax receipts were provisionally estimated as £15.5 billion in July 2025, £2.7 billion more than in July 2024. This was £0.6 billion more than the £14.9 billion forecast in March 2025 by the OBR.

As well as primarily affecting July receipts, the revenue raised through SA Income Tax also tends to lead to higher receipts in August, although to a lesser extent. This is because any delayed July payments will be recorded in August instead. We recommend considering July and August SA receipts together when making year-on-year comparisons.

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

Central government current expenditure

Central government spending data for July 2025 are provisional. There is uncertainty around these estimates until more detailed departmental information becomes available over time.

Central government's current expenditure was provisionally estimated as £92.1 billion in July 2025, £5.3 billion more than in July 2024. Of this £5.3 billion increase in spending:

• central government departmental spending on goods and services increased by £2.9 billion to £38.7 billion, as pay rises and inflation increased running costs

• net social benefits paid by central government increased by £1.6 billion to £27.6 billion, largely caused by inflation-linked increases in many benefits and earnings-linked increases to State Pension payments

• central government debt interest payable increased by £0.2 billion to £7.1 billion, with movements in the Retail Prices Index (RPI) having little effect on index-linked gilt interest this month

• payments to support the day-to-day running of local government decreased by £0.3 billion to £13.9 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

Central government net investment

Central government net investment was £9.6 billion in July 2025, £7.3 billion less than in July 2024.

In July 2025, central government made a £3.4 billion quarterly payment to the Bank of England (BoE) Asset Purchase Facility (APF) Fund. This was an £8.8 billion smaller payment than in July 2024. These payments are recorded as both central government net investment expenditure and BoE receipts, and so have no impact on overall public sector borrowing (PSNB ex).

Interest payable on central government debt

Movements in the RPI had little effect on the debt interest payable in July 2025. This follows a large rise affecting last month, largely because of the energy price-cap increase in April 2025. At £7.1 billion in July 2025, the interest payable on central government debt was £0.2 billion more than in July 2024.

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 interest is described as "capital uplift" and affects the value of the gilt principal. Capital uplift was £1.1 billion in July 2025, largely reflecting the 0.2% increase in the RPI between April and May 2025.

Figure 2 shows this series as the light blue portion of each stacked bar. It excludes the uplift payable at the time of an index-linked gilt redemption. These redemption payments are already recorded as accrued interest payable across the life of each index gilt.

The public sector spent more than it received in taxes and other income in the financial year (FY) to July 2025. Provisional estimates show it borrowed £60.0 billion over the four-month period, in line with the £59.9 billion forecast by the latest Office for Budget Responsibility (OBR) forecast in March 2025.

Borrowing in the FY to July 2025 was £6.7 billion more than in the FY to July 2024 and the third-highest FY to July borrowing since monthly records began in 1993, after those of July 2020 and 2021 during the coronavirus (COVID-19) pandemic period.

Of the £60.0 billion borrowed by the public sector in the FY to July 2025, the current budget deficit was £42.8 billion. This was £5.4 billion more than in the same four-month period a year ago. Public sector net investment increased by £1.4 billion to £17.1 billion over the same four-month period.

Central government net borrowing

The relationship between central government's receipts and expenditure is an important determinant of public sector net borrowing. Of the £60.0 billion borrowed by the public sector in the FY to July 2025, central government borrowed £69.3 billion, with each of the other subsectors showing a surplus.

Tables 1 to 3 in our Public sector finances summary tables: Appendix M dataset provide an extended presentation of Table 2 and a summary of central government receipts and expenditure data.

Central government current receipts

Central government's current receipts were £352.3 billion in the FY to July 2025, £24.4 billion more than in the same four-month period a year ago. Of this £24.4 billion increase in income:

• central government tax receipts increased by £14.8 billion to £264.7 billion; this included increases of £7.7 billion in Income Tax, £3.2 billion in Value Added Tax (VAT) and £2.5 billion in Corporation Tax receipts

• compulsory social contributions increased by £9.5 billion to £63.8 billion; on 6 April 2025 changes to the rate of National Insurance contributions paid by employers came into effect

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 was provisionally estimated at £375.3 billion in the FY to July 2025, £29.0 billion more than in the same four-month period a year ago. Of this £29.0 billion increase in spending:

• central government departmental spending on goods and services increased by £12.6 billion to £152.2 billion, as pay rises and inflation increased running costs

• interest payable on central government debt increased by £8.7 billion to £41.4 billion, largely because the interest payable on index-linked gilts rises and falls with the Retail Prices Index (RPI)

• net social benefits paid by central government increased by £6.5 billion to £108.1 billion, largely caused by inflation-linked increases in many benefits (including Universal Credit) and earnings-linked increases to State Pension payments

• payments to support the day-to-day running of local government decreased by £0.6 billion to £54.0 billion; these intra-government transfers have no impact on overall public sector borrowing (PSNB ex)

Central government net investment

Central government net investment was £31.3 billion in the FY to July 2025, £13.2 billion less than in the same four-month period a year ago.

Over this period, central government made payments totalling £7.4 billion to the Bank of England (BoE) Asset Purchase Facility (APF) Fund. These payments totalled £16.1 billion less than in the same four-month period of 2024. These payments are recorded as both central government net investment expenditure and BoE receipts, and so have no impact on overall public sector borrowing (PSNB ex).

Local government

Initial estimates suggest that local government was in surplus by £5.9 billion in the FY to July 2025. This was a £1.3 billion smaller surplus than in the same period a year earlier. These estimates remain largely based on the OBR's Economic and fiscal outlook - March 2025 and monthly profiles published in May 2025 (PDF, 256KB).

Provisional estimates show the public sector borrowed £148.3 billion in the financial year ending (FYE) March 2025. This was the third-highest borrowing in any financial year since records began in the FYE March 1947, after the equivalent 12-month period of the FYE March 2021 during the coronavirus (COVID-19) pandemic, and the FYE March 2010 following the global financial downturn. 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 provides a more thorough and reliable measure for comparison of the UK's fiscal position over time.

We currently estimate the total borrowed in the FYE March 2025 was equivalent to 5.1% of GDP, 0.3 percentage points higher than in the FYE March 2024.

We describe the methodology used for the presentation of our GDP ratios in our The use of GDP in public sector fiscal ratio statistics methodology.

The public sector balance sheet describes its financial position at a point in time. It shows its liabilities (amounts owed) and its assets (amounts owned).

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.

Table 3 presents the narrowest balance sheet measure, which is the redemption value of central government gilts. It then builds on this measure, widening coverage by both the subsector and the range of asset and liability types included, to reach the far wider measure of public sector net worth. We explain this measure in our Wider measures of the public sector balance sheet: public sector net worth methodology.

Our Public sector balance sheet tables: Appendix N dataset presents a detailed reconciliation between the balance sheet measures summarised in Table 3.

Public sector net debt

Public sector net debt excluding public sector banks (PSND ex) is a widely used balance sheet measure used to describe the UK public sector's financial position at a point in time. Expressing net debt as a ratio of gross domestic product (GDP) gives an estimate of its affordability and provides a more thorough and reliable measure for comparison of the UK's fiscal position over time.

The net debt-to-GDP ratio at the end of July 2025 was provisionally estimated at 96.1%, 0.5 percentage points more than a year ago. However, this is a highly provisional estimate. It is likely to be revised in future publications because it partly relies on GDP estimates based on the Office for Budget Responsibility's Economic and fiscal outlook - March 2025 report.

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 debt excluding the Bank of England (BoE) was £2,714.6 billion at the end of July 2025, or around 90.2% of GDP. This was £176.8 billion, or 5.9 percentage points of GDP, less than the wider measure of net debt (including the BoE). This difference was largely a result of the BoE's quantitative easing activities, including the gilt-purchasing activities of the Asset Purchase Facility (APF) Fund.

The APF Fund's gilt holding is not recorded directly as a component of public sector net debt. Instead, in July 2025, we recorded the £88.7 billion difference between the £586.4 billion of reserves created to purchase its gilts (at market value at the time of purchase) and their £497.7 billion redemption value. For details of the BoE's contribution to public sector net debt, see Table PSA9A of our Public sector finances tables 1 to 10: Appendix A dataset.

Public sector net financial liabilities

Public sector net financial liabilities excluding public sector banks (PSNFL ex) were £2,525.3 billion at the end of July 2025. This was equivalent to an estimated 83.9% of GDP. This was £186.3 billion, or 2.3 percentage points, more than at the end of July 2024.

PSNFL ex adds further assets and liabilities to those recorded in debt (PSND ex). These extra assets are currently valued at more than the extra liabilities. This means that PSNFL ex was 12.2 percentage points of GDP less than PSND ex, which stood at 96.1% of GDP at the end of July 2025.

We explain the financial assets and liabilities captured in PSNFL ex 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 ex that fall outside of the PSND ex boundary are not updated monthly. Instead, they are updated quarterly, or when data become available. These data were updated on 20 June 2025.

A more detailed presentation of the public sector balance sheet is available in our Public sector net worth: Appendix O dataset, released on 20 June 2025.

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.

Tables 4 to 6 of our Public sector finances summary tables: Appendix M dataset compare our latest public sector finances data with those in our Public sector finances, UK: June 2025 bulletin, published on 22 July 2025. They highlight the revisions to borrowing by subsector, with additional detail for central government receipts and expenditure.

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.

Revisions to public sector net borrowing in the financial year to June 2025

We have increased our provisional estimate of public sector net borrowing (PSNB ex) in the financial year (FY) to June 2025 by £1.1 billion to £58.9 billion since publishing our Public sector finances, UK: June 2025 bulletin.

We have increased our previous estimate of the central government current budget deficit for the three months to June 2025 by £1.7 billion. This change was largely because of regular updates to our provisional estimates of debt interest payable and spending on goods and services. Our previous estimate of total central government current receipts remains largely unchanged, though there were several offsetting updates to tax receipts and National Insurance contributions receipts.

Tables 5 to 6 of our Public sector finances summary tables: Appendix M dataset present the revisions to our previously published estimates of central government receipts and spending by component.

Over the same period, we have reduced our initial estimates of central government net investment by £0.7 billion. Initial estimates for the early months of the financial year contain more forecast data than in other months and are typically prone to sizeable revisions in later months.

Revisions to public sector net borrowing earlier financial years

Each August we regularly make longer run changes to our receipts figures to include the latest available data. This exercise accompanies HM Revenue and Customs' (HMRC's) alignment of their in-year tax estimates to their audited accounts for the latest full financial year, in this case for the financial year ending (FYE) March 2025.

This month we updated our central government tax receipts back to the FYE March 2019 and in doing so have made some relatively small revisions to borrowing in most years over the seven-year period of between negative £0.5 billion and positive £0.8 billion.

These and other changes to our receipts data are summarised in Table 5 of our Public sector finances summary tables: Appendix M dataset.

Revisions to public sector net debt at the end of June 2025

We have reduced our estimate of public sector net debt (PSND ex) at the end of June 2025 by £0.4 billion to £2,874.1 billion, since publishing our Public sector finances, UK: June 2025 bulletin. This change was largely because of regular updates to Bank of England data, which are published a month in arrears.

Revisions to gross domestic product

We have updated our previous estimate of gross domestic product (GDP) for the first quarter of the FYE March 2026 with that published in our GDP first quarterly estimate, UK: April to June 2025 bulletin on 14 August 2025.

This update reduced our previous estimate of debt expressed as a percentage of GDP at the end of June 2025 by 0.4 percentage points to 95.8%. This was because the published GDP figure for the April to June 2025 quarter was higher than our previous estimate.

Planned updates to our figures for September 2025

We will implement some of our regular annual data updates in September 2025 to incorporate the latest available data. This includes the latest data for local government, Student Loans, and the successor enterprises to Bulb Energy - Octopus Energy Retail Limited (Bid Co) and Octopus Energy Operations Limited (Hive Co). We expect to make further regular annual data updates in the subsequent months.

In addition, we plan to fully implement the classifications of the British Business Bank, the National Wealth Fund, and the Development Bank of Wales to the central government subsector. This change is discussed in our article Economic statistics classifications and developments in public sector finances: July 2025, along with its expected provisional impacts.

Public sector

In the UK, the public sector consists of six subsectors: central government, local government, public non-financial corporations, public sector funded pensions, the Bank of England (BoE) and public financial corporations (including public sector banks). The figures presented in this release exclude public sector banks unless otherwise noted.

The NatWest Group, the last remaining public sector bank, was reclassified to the private sector as of June 2024.

Public sector current budget deficit

Public sector current budget deficit (PSCBD) is the gap between current expenditure and current receipts on an accruals basis, having taken account of depreciation. PSCBD is effectively an estimate of borrowing to fund day-to-day public sector activities and is the reference statistic used for a UK government fiscal rule.

The current budget is in surplus when receipts are greater than expenditure and is indicated with a negative sign.

Public sector net borrowing

Public sector net borrowing (PSNB) is the gap between total expenditure and current receipts on an accruals basis. If receipts exceed expenditure, this is referred to as a surplus and is indicated with a negative sign. Borrowing is often referred to by commentators as "the deficit".

Public sector current budget deficit and net borrowing are measured on an accruals basis, where transactions for income are recorded when earned and expenses are recorded when incurred, rather than when the bills are paid (on a cash basis). 

Central government net cash requirement

The central government net cash requirement (CGNCR) represents the cash needed to be raised from the financial markets over a period to finance its activities. The amount of cash required will be affected by changes in the timing of payments to and from the public sector, rather than when these liabilities were incurred.

Public sector net debt

Public sector net debt (PSND), often referred to by commentators as "the national debt", represents the amount of money the public sector owes to the private sector and overseas (in the form of loans, debt securities, deposit holdings and currency), net of liquid financial assets held.

Public sector net financial liabilities

Public sector net financial liabilities (PSNFL) is a wider measure of the balance sheet than public sector net debt and includes all financial assets and liabilities recognised in the national accounts. PSNFL is the reference statistic used for a UK government fiscal rule and is sometimes referred to as "net financial debt".

Broadening the PSNFL measure to include the public sector's non-financial assets provides public sector net worth (PSNW), our widest balance sheet measure.

Methodology guides

To supplement this release, we publish an accompanying Monthly statistics on the public sector finances: a methodological guide and Public sector finances Quality and Methodology Information outlining the strengths, limitations and appropriate uses of government finance statistics.

We also explain the recording of interest payable to holders of UK government gilts in the UK public sector finances in our Calculation of interest payable on government gilts methodology and our Use of gross domestic product (GDP) in public sector fiscal ratio statistics methodology.

Accredited official statistics

Public sector net borrowing, cash requirement and debt are accredited official statistics. These accredited official statistics were independently reviewed by the Office for Statistics Regulation in June 2017. They comply with the standards of trustworthiness, quality, and value in the Code of Practice for Statistics and should be labelled "accredited official statistics".

Official statistics

Public sector net financial liabilities and public sector net financial worth are both official statistics. These measures were introduced after June 2017 and so have not yet been reviewed by the Office for Statistics Regulation. 

Official statistics in development

Public sector net worth is labelled as "official statistics in development". Until October 2023, these were called "experimental statistics". Read more about the change in our Guide to official statistics in development.

Central government tax receipts and social contributions

In the most recent months, tax receipts recorded on an accrued basis are subject to some uncertainty. This is because many taxes such as Value Added Tax (VAT), Corporation Tax, and Pay As You Earn (PAYE) Income Tax contain some forecast cash receipts data and are liable to revision when actual cash receipts data are received.

The forecasts underlying our current tax estimates largely reflect the expectations published in the Office for Budget Responsibility's (OBR's) Economic and fiscal outlook - March 2025 report

Public corporations

Data for public corporations in the financial year ending (FYE) March 2026 are highly provisional initial estimates for the UK. They are largely based on the OBR's Economic and fiscal outlook - March 2025 report.

Data for public corporations in FYE March 2024 and FYE March 2025 remain largely based on the OBR's Economic and fiscal outlook - October 2024 report, and are supplemented by in-year estimates for train operating companies, the Housing Revenue Account, and surveyed public corporations.

Local government

Local government data for the FYE March 2026 are highly provisional initial estimates for the UK. They are largely based on the OBR's Economic and fiscal outlook - March 2025 and monthly profiles published in May 2025.

Local government data for the FYE March 2025 remain provisional estimates for the UK. They are largely based on published budget data for England, Scotland and Wales, with estimates included 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, and 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 the FYE March 2024, we include a £0.5 billion downward adjustment to Scotland's capital expenditure.

For the FYE March 2025, we include a £3.0 billion upward adjustment to England's current expenditure.

To reflect the most recently available data for housing benefits, we have applied further downward adjustments to budget data for current expenditure on benefits of £0.2 billion in the FYE March 2024 and £1.4 billion in the FYE March 2025.

The UK's fiscal targets

The UK government has legislated 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 current budget deficit

The UK government presently targets that by the end of the FYE March 2030, the current budget should be in surplus. In other words, that the public sector's day-to-day spending should be met by its revenues. The public sector would, therefore, be forecast to be only borrowing for investment (capital) spending.

Our latest figures suggest that the public sector current budget deficit was £70.5 billion in the FYE March 2025; this was £7.6 billion more than in the FYE March 2024.

Public sector net financial liabilities

The present UK government target is that by the end of March 2030, public sector net financial liabilities (PSNFL) should be falling relative to the size of the economy (gross domestic product or GDP) compared with the previous year.

Our latest figures show that PSNFL were provisionally estimated at 82.0% of GDP at the end of March 2025; this was 1.2 percentage points more than at the end of March 2024.

Comparing our data with official forecasts

The independent 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 latest forecast was published in the OBR's Economic and fiscal outlook - March 2025 report.