Public sector finances, UK: May 2025

• Borrowing – the difference between total public sector spending and income – was £17.7 billion in May 2025; this was £0.7 billion more than in May 2024 and the second-highest May borrowing since monthly records began in 1993, after that of May 2020.

• Borrowing in the financial year to May 2025 was £37.7 billion; this was £1.6 billion more than in the same two-month period of 2024 and the third-highest April to May borrowing since monthly records began, after those of 2020 and 2021.

• The current budget deficit – borrowing to fund day-to-day public sector activities – was £12.8 billion in May 2025; this was £1.7 billion less than in May 2024 and the fourth-highest May current budget deficit since monthly records began in 1997.

• The current budget deficit in the financial year to May 2025 was £27.4 billion; this was £1.3 billion less than in the same two-month period of 2024 and the third-highest April to May current budget deficit since monthly records began.

• Public sector net debt excluding public sector banks was provisionally estimated at 96.4% of gross domestic product (GDP) at the end of May 2025; this was 0.5 percentage points more than at the end of May 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 May 2025; this was 2.5 percentage points more than at the end of May 2024, but 12.5 percentage points less than for public sector net debt.

• Central government net cash requirement (excluding UK Asset Resolution Ltd and Network Rail) was £24.1 billion in May 2025; this was £0.4 billion less than in May 2024.

Initial estimates show that the public sector spent more than it received in taxes and other income in May 2025, requiring it to borrow £17.7 billion.

This was £0.7 billion more borrowing than in May 2024 and £0.6 billion more than the £17.1 billion forecast by the Office for Budget Responsibility in March 2025.

Borrowing in May 2025 was the second highest in any May since monthly records began in 1993, behind that of May 2020, during the coronavirus (COVID-19) pandemic period.

Public sector net borrowing is the sum of the current budget deficit and the public sector's net (capital) 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 and current expenditure, while taking account of capital consumption (depreciation).

The current budget was in deficit by £12.8 billion in May 2025, which was £1.7 billion less than in May 2024.

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

Net investment was estimated at £4.9 billion in May 2025, which was £2.3 billion more than in May 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.

Central government borrowing

Central government forms the largest part of the public sector and includes government departments such as HM Revenue and Customs (HMRC), Department of Health and Social Care, Department for Work and Pensions, Department for Education, 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 £17.7 billion borrowed by the public sector in May 2025, central government borrowed £16.5 billion.

Central government current receipts

Central government's current receipts were £82.5 billion in May 2025, £5.3 billion more than in May 2024. Of this £5.3 billion increase in income:

• central government tax receipts increased by £3.5 billion to £61.7 billion; this included increases of £1.9 billion in Income Tax, £0.8 billion in Value Added Tax (VAT), and £0.6 billion in Corporation Tax receipts

• compulsory social contributions increased by £1.8 billion to £15.1 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 spending data for May 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 £89.2 billion in May 2025, £4.1 billion more than in May 2024. Of this overall £4.1 billion increase in spending:

• central government departmental spending on goods and services increased by £2.8 billion to £37.9 billion, as pay rises and inflation increased running costs

• net social benefits paid by central government increased by £2.0 billion to £27.1 billion, 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 £12.1 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 debt interest payable decreased by £0.7 billion to £7.6 billion, largely because the interest payable on index-linked gilts rises and falls with the Retail Prices Index (RPI)

• payments abroad decreased by £0.4 billion to £0.3 billion, largely because of smaller net payments made to the EU

Central government net investment

Central government net investment was £6.1 billion in May 2025, £2.0 billion more than in May 2024. This includes an increase of £0.9 billion in gross capital formation and an increase of £1.6 billion in grants to the private sector, along with several smaller partially offsetting changes.

Borrowing in other subsectors

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.

Interest payable on central government debt

The interest payable on central government debt was £7.6 billion in May 2025, £0.7 billion less than in May 2024. This was the second-highest May interest payable since monthly records began in 1997 after that of May 2024.

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 interest is described as "capital uplift" and affects the value of the gilt principal.

Capital uplift was £1.9 billion in May 2025, largely reflecting the 0.3% increase in the RPI between February and March 2025. This was a smaller capital uplift compared with May 2024.

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.

For further details of our approach, see our Calculation of interest payable on government gilts methodology.

The public sector spent more than it received in taxes and other income in the financial year (FY) to May 2025. Provisional estimates show it borrowed £37.7 billion over the two-month period, £1.6 billion more than in the FY to May 2024 but £2.9 billion less than the £40.7 billion forecast by the Office for Budget Responsibility (OBR) in March 2025.

Within public sector borrowing in the FY to May 2025, the current budget deficit was £27.4 billion. This is £1.3 billion less than in FY to May 2024. Public sector net investment increased by £2.9 billion to £10.3 billion for the same two-month period.

The public sector (excluding public sector banks) borrowed £37.7 billion in the FY to May 2025. Of this, central government borrowed £44.2 billion. This larger central government borrowing was partially offset by a £4.4 billion local government surplus and a £1.4 billion Bank of England (BoE) surplus.

In the FY to May 2025, central government has made payments totalling £4.1 billion to the BoE under its Asset Purchase Facility (APF) Fund indemnity agreement. These intra-public sector transfers have no impact on overall public sector borrowing (PSNB ex). They increased central government's borrowing by £4.1 billion in the FY to May 2025 but reduced the borrowing impact of the BoE by an equal and offsetting amount.

Central government net borrowing

Central government net borrowing is the sum of its current budget deficit and its net (capital) investment spending.

The current budget, which is usually in deficit, can be considered as borrowing to fund day-to-day central government activities. This is the difference between its current receipts and current expenditure, while taking account of capital consumption (depreciation).

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 £165.1 billion in the FY to May 2025, £10.0 billion more than in the same two-month period a year ago. Of this £10.0 billion increase in income:

• central government tax receipts increased by £6.4 billion to £123.1 billion; this included increases of £3.0 billion in Income Tax, £1.4 billion in Value Added Tax (VAT) and £0.9 billion in Corporation Tax receipts

• compulsory social contributions increased by £3.9 billion to £30.2 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 as £184.2 billion in the FY to May 2025, £9.5 billion more than in the same two-month period a year ago. Of this overall £9.5 billion increase in spending:

• central government departmental spending on goods and services increased by £6.9 billion to £75.6 billion, as pay rises and inflation increased running costs

• net social benefits paid by central government increased by £3.3 billion to £53.9 billion, 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 £0.8 billion to £28.5 billion; these intra-government transfers have no impact on overall public sector borrowing (PSNB ex)

• interest payable on central government debt decreased by £1.0 billion to £16.7 billion, largely because the interest payable on index-linked gilts rises and falls with the Retail Prices Index (RPI)

• net current grants abroad decreased £0.6 billion to £0.8 billion, largely because of smaller net payments made to the EU

Central government net investment

Central government net investment in the FY to May 2025 was £17.6 billion, £4.0 billion less than in the same period a year ago.

This £17.6 billion net expenditure includes £4.1 billion in regular payments from HM Treasury to the Bank of England (BoE) Asset Purchase Facility (APF) Fund. These intra-public sector transfers have no impact on overall public sector borrowing (PSNB ex). They increased central government's borrowing by £4.1 billion in the FY to May 2025 but reduced the borrowing impact of the BoE by an equal and offsetting amount.

Local government

Initial estimates suggest that local government was in surplus by £4.4 billion in the FY to May 2025. This was a £0.1 billion smaller surplus than in the same period a year earlier.

Our initial monthly local government estimates for the current financial year (financial year ending (FYE) March 2025) are largely based on the OBR's Economic and fiscal outlook – March 2025 and monthly profiles published in May 2025. While local government data for the FYE March 2025 remain provisional, being largely based on published budget data for England, Scotland and Wales, with estimates included for Northern Ireland.

Provisional estimates show the public sector borrowed £148.7 billion in the financial year ending (FYE) March 2025. This was the third-highest borrowing in any financial year since records began in FYE March 1947, behind 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 the most 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 May 2025 was provisionally estimated at 96.4%, 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 £2,687.7 billion at the end of May 2025, or around 90.4% of GDP. This was £179.3 billion, or 6.0 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 May 2025, we recorded the £90.3 billion difference between the £619.7 billion of reserves created to purchase its gilts (at market value at the time of purchase) and their £529.4 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 £2,496.1 billion at the end of May 2025. This was equivalent to an estimated 83.9% of GDP. This was £185.5 billion, or 2.5 percentage points, more than at the end of May 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 12.5 percentage points of GDP less than PSND ex, which stood at 96.4% of GDP at the end of May 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: April 2025 bulletin, published on 22 May 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 April 2025

Our initial estimate of public sector net borrowing (PSNB ex) in April 2025 remains largely unchanged since publishing our Public sector finances, UK: April 2025 bulletin, at £20.1 billion.

An upward revision of £0.8 billion to our previous estimate of central government borrowing was more than offset by a £0.9 reduction to our previous estimate of local government net borrowing.

These changes were largely because of regular monthly updates to our central government data that included a £0.9 billion increase to current transfer payments to local authorities. This increased central government borrowing and decreased local government borrowing by equal and offsetting amounts.

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.

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

We have increased our provisional estimate of PSNB ex in the financial year ending (FYE) March 2025 by £0.4 billion to £148.7 billion since publishing our April 2025 bulletin. This change was largely because of regular updates to our data. Of these updates:

• our previous estimate of central government borrowing has increased by £0.2 billion to £155.0 billion, with a reduction of £1.1 billion to our previous estimate of current receipts, a £1.1 billion reduction to our previous estimate of current spending, and a £0.1 billion increase to our previous estimate of net investment

• our previous estimate of local government borrowing has increased by £0.6 billion to £11.6 billion, with a reduction of £0.3 billion to our previous estimate of receipts and a £0.3 billion increase to our previous estimate of current spending

• our previous estimate of public corporations' surplus has increased by £0.3 billion to £1.6 billion; this change was a combination of several smaller updates

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.

Within central government net borrowing, we have reduced our estimate of central government current receipts by £1.1 billion in the FYE March 2025. This was largely because of a £0.8 billion reduction in interest receipts, which are largely reported one quarter in arrears. Additionally, we have reduced our estimate of central government current spending by £1.1 billion over the same 12-month period through a combination of several smaller changes.

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

We have increased our estimate of public sector net debt (PSND ex) at the end of April 2025 by £3.2 billion to £2,831.5 billion, since publishing our April 2025 bulletin. This change was largely because of quarterly updates to our local government and public corporations' data.

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 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.

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.

Gambling levy

On 27 November 2024, the UK government announced the introduction of a statutory levy on gambling operators. In June 2025, this gambling levy was classified by the Office for National Statistics as a central government "other" tax on production and recorded for the first time in the Public sector finances, UK: May 2025 statistical bulletin.

The government expect this levy to raise around £100 million per financial year.

Provisional estimates have been recorded from April 2024 to date based on those published in the 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 FYE March 2024, we include a £0.5 billion downward adjustment to Scotland's capital expenditure.

For 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 FYE March 2024 and £1.4 billion in FYE March 2025.

NatWest share sales

On 30 May 2025, the government announced it had sold its remaining shares in NatWest Group (formerly Royal Bank of Scotland, RBS). This final share sale raised £0.8 billion which has reduced the central government net cash requirement in May 2025 and public sector net debt at the end of May 2025 by a corresponding amount. Public sector net borrowing in May 2025 was unaffected by this sale.

The NatWest Group was re-classified from the public sector to the private sector as of June 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.