Public sector finances, UK: December 2025

• Borrowing - the difference between total public sector spending and income - was £11.6 billion in December 2025; this was £7.1 billion or 38.0% less than December 2024 and the 10th highest December since monthly records began in 1993 (not adjusted for inflation).

• Borrowing in the financial year to December 2025 was £140.4 billion; this was £0.3 billion or 0.2% less than in the same nine-month period of 2024, but still the third-highest April to December borrowing on record (not adjusted for inflation), after those of 2020 and 2024.

• Borrowing in the financial year to December 2025 was provisionally estimated at 4.6% of gross domestic product (GDP); this was 0.2 percentage points less than in the same nine-month period of 2024.

• The current budget deficit - borrowing to fund day-to-day public sector activities - was £5.8 billion in December 2025; this brings the total current budget deficit in the financial year to December 2025 to £94.9 billion, which is £1.6 billion or 1.6% less than in the same nine-month period of 2024.

• 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 95.5% of GDP at the end of December 2025; this was 0.9 percentage points more than at the end of December 2024 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 85.0% of GDP at the end of December 2025; this was 2.5 percentage points more than at the end of December 2024, but 10.5 percentage points less than for public sector net debt.

• Central government net cash requirement (excluding UK Asset Resolution Ltd and Network Rail) - the additional cash needed to be raised from the financial markets to finance activities - was £14.5 billion in December 2025; this was £4.9 billion or 25.2% less than in December 2024.

Initial estimates show that the public sector spent more than it received in taxes and other income in December 2025, requiring it to borrow £11.6 billion. This was £7.1 billion, or 38.0%, less than in December 2024.

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 deficit was £5.8 billion in December 2025, which was £4.8 billion (or 45.3%) less than in December 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 £5.8 billion in December 2025, which was £2.3 billion (28.3%) less than in December 2024. A £1.7 billion capital transfer was paid to the private sector in December 2024 as part of a repurchase of military dwellings from Annington Homes. There was no such payment in December 2025.

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 dropdown 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

• the Department of Health and Social Care

• the Department for Work and Pensions

• the Department for Education

• the Ministry of Defence

• other government agencies

The relationship between central government's receipts and expenditure is an important determinant of public sector net borrowing. Of the £11.6 billion borrowed by the public sector in December 2025, central government borrowed £8.2 billion.

Central government current receipts

Central government's current receipts were £94.0 billion in December 2025, which is £7.7 billion or 8.9% more than in December 2024. Of this £7.7 billion increase in income:

• central government tax receipts increased by £4.6 billion to £70.0 billion; this included increases of £2.5 billion in Income Tax receipts (including PAYE and self-assessed income tax), £0.8 billion in Corporation Tax receipts and £0.6 billion in Value Added Tax (VAT) receipts

• compulsory social contributions increased by £3.0 billion to £18.4 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 largely reflect the expectations published in the Economic and fiscal outlook - March 2025 report from the Office for Budget Responsibility (OBR).

Monthly receipts profiles consistent with the OBR's Economic and fiscal outlook - November 2025 report are published by OBR at 9:30AM on 22 January 2025. We expect to use these fully to inform our Public Sector Finances, UK January 2026 statistical bulletin published on 20 February 2026.

However, estimates of corporation tax receipts have already been updated to incorporate provisional estimates based on the OBR's November 2025 forecast because of their heavier reliance on forecast data than other tax receipts.

Central government current expenditure

Central government spending data for December 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 £92.9 billion in December 2025, which is £3.2 billion or 3.5% more than in December 2024. Of this £3.2 billion increase in spending:

• net social benefits paid by central government increased by £2.1 billion to £28.1 billion; this was largely caused by inflation-linked increases in many benefits and earnings-linked increases to state pension payments

• central government departmental spending on goods and services increased by £2.3 billion to £39.3 billion, as pay rises and inflation increased running costs

• current grants paid to the rest of the world decreased by £1.3 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

In December 2025, the public sector spent more than it received in taxes and other income, leading to it borrowing £11.6 billion from the UK private sector and overseas. 

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 December 2025 was £9.1 billion, £0.2 billion more than in December last year.

The interest payable on index-linked gilts rises and falls with the Retail Prices Index (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.

The £9.1 billion interest payable on central government debt in December 2025 includes a capital uplift of £2.6 billion. This largely reflects the 0.3% increase in the RPI between September and October 2025.

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.

The public sector spent more than it received in taxes and other income in the financial year (FY) to December 2025. Provisional estimates show it has borrowed £140.4 billion over the nine-month period.

Borrowing in the FY to December 2025 was £0.3 billion, or 0.2% less than in the FY to December 2024, not adjusted for inflation. This is the third-highest FY to December borrowing since monthly records began in 1993, after those of 2020 and 2024.

Of the £140.4 billion borrowed by the public sector in the FY to December 2025, the current budget deficit was £94.9 billion. This was £1.6 billion or 1.6% less than in the same nine-month period a year ago. Public sector net investment increased by £1.2 billion or 2.7% to £45.5 billion over the same nine-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 £140.4 billion borrowed by the public sector in the FY to December 2025, central government borrowed £140.2 billion, with amounts borrowed by other smaller subsectors largely offsetting each other.

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 £789.9 billion in the FY to December 2025, which is £56.1 billion or 7.6% more than in the same nine-month period a year ago. Of this £56.1 billion increase in income:

• central government tax receipts increased by £33.2 billion to £589.4 billion; this included increases of £16.6 billion in Income Tax, £6.2 billion in Value Added Tax (VAT) and £5.0 billion in Corporation Tax receipts

• compulsory social contributions increased by £23.8 billion to £149.3 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 was provisionally estimated at £828.9 billion in the FY to December 2025, which is £58.2 billion or 7.6% more than in the same nine-month period a year ago. Of this £58.2 billion increase in spending:

• central government departmental spending on goods and services increased by £24.2 billion to £345.1 billion, as pay rises and inflation increased running costs

• net social benefits paid by central government increased by £17.0 billion to £247.2 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 £13.0 billion to £79.9 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 £1.5 billion to £111.3 billion; these intra-government transfers have no impact on overall public sector borrowing

Central government net investment

Central government net investment was £68.8 billion in the FY to December 2025, which is £11.8 billion less than in the same nine-month period a year ago. Over this period, central government made payments totalling £14.1 billion to the Bank of England (BoE) Asset Purchase Facility Fund, which is £16.7 billion less than in the same nine-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 suggest that local government borrowing was £8.3 billion in the FY to December 2025. This was broadly equal to that in the same nine-month period in 2024.

Local government data for the financial year to December 2025 are provisional estimates for the UK. They are largely based on budget data for England, Scotland and Wales, with estimates included for Northern Ireland.

Provisional estimates show the public sector borrowed £152.3 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 provides a more consistent measure for comparison of the UK's fiscal position over time.

Borrowing in the first nine months of the current financial year was provisionally estimated at 4.6% of GDP. This was 0.2 percentage points less than during the same period in 2024 and was the twelfth-highest borrowing ratio in any April to December period since monthly records began in 1993.

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.

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 3.

Public sector net debt

Public sector net debt excluding public sector banks (PSND ex) 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 December 2025 was provisionally estimated at 95.5%, which is 0.9 percentage points more than a year ago. However, this is a highly provisional estimate.

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 ex) adds further financial assets and financial liabilities to those recorded in debt (PSND ex).

These extra financial assets are currently valued at more than the extra financial liabilities. This means that at 85.0% of GDP, PSNFL ex was 10.5 percentage points of GDP less than PSND ex at the end of December 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 19 December 2025 and will next be updated on 20 March 2026.

A more detailed presentation of the public sector balance sheet is available in our Public sector net worth: Appendix O dataset, released on 19 December 2025.

The independent Office for Budget Responsibility (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 - November 2025 report. We expect corresponding monthly profiles to be published on 22 January 2026.

The UK government has announced that the Spring forecast will be published on 3 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 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 £76.3 billion in the FYE March 2025; this was £9.9 billion more than in the FYE March 2024

• PSNFL was 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.

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

Since publishing our Public sector finances, UK: November 2025 bulletin, we have reduced our estimate of public sector net borrowing (PSNB ex) in the first eight months of the financial year by £3.5 billion to £128.8 billion.

This reduction was largely because of an increase to our previous estimate of central government tax receipts of £3.5 billion. Most notably, there was an increase of £1.9 billion to our previous estimate of corporation tax receipts because of updated cash 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: November 2025 bulletin, published on 19 December 2025. They highlight the revisions to borrowing by subsector, with additional detail for central government receipts and expenditure.

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 £0.3 billion to £152.3 billion. This reduction was because of an increase of £0.3 billion to our previous estimate of corporation tax receipts.

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

We have reduced our estimate of public sector net debt (PSND ex) at the end of November 2025 by £2.4 billion to £2,925.4 billion. This is because of regular monthly updates to data used to estimate the Bank of England's contribution to debt, which are published one month in arrears.

Revisions to GDP

This month, we have updated our previous estimates of nominal gross domestic product (GDP) with those published in our GDP quarterly national accounts, UK: July to September 2025 bulletin, published on 22 December 2025.

GDP estimates in the most recent periods are marginally higher than previously estimated, meaning that our headline statistics expressed as a ratio of GDP have reduced.

Our previously published estimate of public sector net debt as a ratio of GDP at the end of November 2025 reduced by 0.2 percentage points from 95.6% to 95.4%. It reduced by 0.1 percentage points because of the update to GDP and 0.1 percentage points because of a reduction to our estimate of debt.

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

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", is a measure of 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 our accompanying Monthly statistics on the public sector finances: a methodological guide and Public sector finances quality and methodology information (QMI) 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.

Statistical designation

The Office for Statistics Regulation (OSR) independently reviewed the public sector net borrowing, cash requirement and debt accredited official statistics 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". 

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". We are developing how we collect the data and produce the statistics to improve their quality. 

Central government

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.

The ONS and HM Treasury are engaging with this process to lend their support to it. The Office for Statistics Regulation will provide an independent perspective on HMRC's review to ensure compliance with the Code of Practice for Statistics.

The ONS 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

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 first 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, published provisional outturn data for Scotland, and estimates 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 FYE March 2025, these adjustments include:

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

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 FYE March 2026. 

Public corporations

Data for public corporations in the current financial year to date are highly provisional initial estimates for the UK. They are largely based on the OBR's Economic and fiscal outlook - November 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.