Public sector finances, UK: March 2025

• Borrowing – the difference between total public sector spending and income – was £16.4 billion in March 2025; this was £2.8 billion more than in March 2024 and the third-highest March borrowing since monthly records began in 1993.

• Borrowing in the financial year ending (FYE) March 2025 was provisionally estimated at £151.9 billion; this was £20.7 billion more than in the same twelve-month period a year earlier and £14.6 billion more than the £137.3 billion forecast by the Office for Budget Responsibility (OBR).

• Compared with the annual value of the UK’s economy, borrowing in the FYE March 2025 was provisionally estimated at 5.3% of the UK’s gross domestic product (GDP), 0.5 percentage points more than in the same twelve-month period a year earlier and the eighth highest value since the financial crisis in the FYE 2009.

• The current budget deficit – borrowing to fund day-to-day public sector activities – in the FYE March 2025 was provisionally estimated at £74.6 billion; this was £12.6 billion more than in the same twelve-month period a year earlier and £13.9 billion more than the £60.7 billion forecast by the OBR.

• The current budget deficit in the FYE March 2025 was provisionally estimated at 2.6% of the GDP, 0.3 percentage points more than in the same twelve-month period a year earlier and the 12th highest value since the financial crisis in the FYE 2009.

• Public sector net debt excluding public sector banks was provisionally estimated at 95.8% of GDP at the end of March 2025; this was 0.2 percentage points more than at the end of March 2024 and remains at levels last seen in the early 1960s.

• Public sector net financial liabilities excluding public sector banks were provisionally estimated at 83.5% of GDP at the end of March 2025; this was 2.6 percentage points more than at the end of March 2024, but 12.3 percentage points less than for public sector net debt.

• Central government net cash requirement (excluding UK Asset Resolution Ltd and Network Rail) was £21.1 billion in March 2025; this was £7.4 billion less than in March 2024, and brings the total for the FYE March 2025 to £180.5 billion, £7.9 billion more than forecast by the OBR.

Each April we change the focus of this section from the latest month to the first estimate of latest financial year.

Initial estimates show that the public sector spent more than it received in taxes and other income in March 2025, requiring it to borrow £16.4 billion.

This was £2.8 billion more borrowing than in March 2024. It is also the third-highest March borrowing since monthly records began in 1993, behind March 2021 borrowing, during the coronavirus (COVID-19) pandemic period, and March 2023 borrowing, when energy prices rose substantially.

Public sector net borrowing includes two broad components: the current budget and 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 and current expenditure, while taking account of capital consumption (depreciation).

Initial estimates show that in March 2025, the current budget was in deficit by £0.2 billion. This was £4.1 billion more than in March 2024, when it was in surplus by £3.9 billion.

Public sector net borrowing is the sum of the current budget deficit and the public sector's net (capital) investment.

Net investment was estimated at £16.2 billion in March 2025, which was £1.3 billion less than in March 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), the Department of Health and Social Care, the Department for Work and Pensions, the Department for Education, and the Ministry of Defence, as well as other government agencies.

The relationship between central government's receipts and expenditure is an important determinant of public sector net borrowing. Central government borrowed £16.2 billion in March 2025; this compares with £16.4 billion borrowed by the whole public sector.

Central government current receipts

Central government's current receipts were £93.5 billion in March 2025, £2.5 billion more than in March 2024. Of this £2.5 billion increase in income:

• central government tax receipts increased by £2.2 billion to £69.3 billion; this included increases of £1.5 billion in Income Tax, £0.5 billion in stamp duty (on land and property), £0.2 billion in Value Added Tax (VAT), and £0.1 billion in Corporation Tax receipts

• compulsory social contributions decreased by £0.3 billion to £17.7 billion

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 March 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 £88.9 billion in March 2025, £6.2 billion more than in March 2024. Of this overall £6.2 billion increase in spending:

• central government departmental spending on goods and services increased by £3.2 billion to £39.6 billion, as pay rises and inflation increased running costs

• net social benefits paid by central government increased by £2.5 billion to £26.0 billion, largely caused by inflation-linked increases in many benefits and pensions

• central government debt interest payable increased by £1.3 billion to £4.3 billion, largely because the interest payable on index-linked gilts rises and falls with the Retail Prices Index (RPI) 

• payments to support the day-to-day running of local government decreased by £0.5 billion to £13.1 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

• payments abroad decreased by £0.5 billion to £1.5 billion, largely because of smaller net payments made to the EU

Central government net investment

Central government net investment decreased by £1.2 billion to £17.1 billion compared with March 2024; historically, March tends to be a peak month for investment spending.

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 £4.3 billion in March 2025, £1.3 billion more than in March 2024. This was the highest central government interest payable in any March since monthly records began in 1997, though only £0.2 billion above the previous record in March 2023.

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 minus £0.6 billion in March 2025, largely reflecting the 0.1% decrease in the RPI between December 2024 and January 2025. This decreased the capital uplift on the three-month lagged index-linked gilts which make up around 95% of the index-linked gilt stock.

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 (FYE) to March 2025. Initial estimates show it borrowed £151.9 billion over the latest 12-month period, £20.7 billion more than in the FYE 2024.

Borrowing in the FYE 2025 was £14.6 billion more than the £137.3 billion forecast by the Office for Budget Responsibility (OBR) in March 2025. Of this, central government and local government borrowing were, respectively, £10.2 billion and £2.6 billion above OBR forecast amounts.

Within public sector borrowing in the FYE 2025, the current budget deficit was £74.6 billion. This is £12.6 billion more than in FYE 2024.

Public sector net investment increased by £8.2 billion to £77.3 billion for the same 12-month period.

Our Public sector finances borrowing by subsector: Appendix R dataset presents public sector borrowing in a matrix table format. It provides a summary by transaction for each of the subsectors. The time period presented in the matrix table can be changed using the drop-down box feature.

The public sector (excluding public sector banks) borrowed £151.9 billion in the financial year ending (FYE) March 2025. Of this, central government borrowed £158.5 billion. This larger central government borrowing was partially offset by a £14.9 billion Bank of England (BoE) surplus and balanced by remaining subsectors.

In the FYE 2025, central government has made payments totalling £36.3 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 £36.3 billion in the FYE 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 provides an extended presentation of Table 1 and a summary of central government receipts and expenditure data.

Central government current receipts

Central government's current receipts were £1,031.2 billion in the FYE 2025, £33.6 billion more than in the same period last year. Of this £33.6 billion increase in income:

• central government tax receipts increased by £37.7 billion to £786.5 billion; this included increases of £24.8 billion in Income Tax, £3.6 billion in Value Added Tax (VAT), £2.6 billion in Corporation Tax receipts, and £2.4 billion in stamp duty (on land and property)

• compulsory social contributions decreased by £7.7 billion to £173.1 billion, largely because of the reductions in the main rates of National Insurance in early 2024

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 £1,031.2 billion in the FYE 2025, £48.5 billion more than in the same 12-month period a year ago. Of this overall £48.5 billion increase in spending:

• central government departmental spending on goods and services increased by £29.8 billion to £436.0 billion, as pay rises and inflation increased running costs

• net social benefits paid by central government increased by £14.6 billion to £306.1 billion, largely caused by inflation-linked increases in many benefits

• payments to support the day-to-day running of local government increased by £9.4 billion to £144.4 billion; these intra-government transfers have no impact on overall public sector borrowing (PSNB ex)

• interest payable on central government debt increased by £2.1 billion to £85.0 billion, largely because the interest payable on index-linked gilts rises and falls with the Retail Prices Index (RPI)

• net current grants abroad decreased £4.3 billion to £9.7 billion, largely because of smaller net payments made to the EU

• subsidies paid by central government decreased by £3.4 billion to £28.9 billion, largely because of the closure of the energy support schemes that were active until June 2023

Central government current budget

Initial data suggests that total central government's current receipts were equal to its total current expenditure at a £ billion level in the FYE 2025. Consequently, the central government current budget deficit of £42.4 billion in the FYE 2025 is completely explained by its capital consumption (depreciation).

At £42.4 billion, central government's current budget deficit was £17.8 billion more than in FYE 2024.

Central government net investment

Central government net investment in the FYE 2025 was £116.1 billion, £4.4 billion less than in the same period a year ago. This £116.1 billion includes £36.3 billion in regular payments from HM Treasury to the BoE APF Fund.

The £8.2 billion reduction in payments to APF were partially offset by a £3.2 billion increase in gross capital formation and other transactions. This included higher payments to the private sector including the £1.7 billion payment to Annington Homes in December 2024 for the repurchase of armed forces personnel housing.

Local government

Initial estimates suggest that local government borrowing was provisionally estimated as £12.0 billion in the FYE 2025. This was £0.4 billion more than in the same period a year earlier. Our provisional monthly estimates for the UK are currently based on published budget data for England, Scotland and Wales, with estimates included for Northern Ireland.

Initial estimates show the public sector borrowed £151.9 billion in the financial year ending (FYE) March 2025. This was the third-highest borrowing in any financial year since records began in FYE 1947, behind the equivalent 12-month period of the FYE 2021 during the coronavirus (COVID-19) pandemic, and the FYE 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.

Our first provisional estimate for the total borrowed in the FYE March 2025 as a ratio of gross domestic product (GDP) was 5.3%, 0.5% points higher than in the FYE 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 March 2025 was provisionally estimated at 95.8%, 0.2 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 March 2025 Office for Budget Responsibility forecast. Our 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 £2,643.8 billion at the end of March 2025, or around 90.0% of GDP. This was £170.1 billion, or 5.8 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 March 2025, we recorded the £90.5 billion difference between the £622.5 billion of reserves created to purchase its gilts (at market value at the time of purchase) and their £532.1 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 £2,452.1 billion at the end of March 2025. This was equivalent to an estimated 83.5% of GDP. This was £180.7 billion, or 2.6 percentage points, more than at the end of March 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 12.3 percentage points of GDP less than PSND ex, which stood at 95.8% of GDP at the end of March 2025.

We explain the financial assets and liabilities captured in PSNFL ex in our 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 last updated on 21 March 2025.

A more detailed presentation of the public sector balance sheet is available in our Public sector net worth: Appendix O dataset, released on 21 March 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: February 2025 bulletin, published on 21 March 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 February 2025

We have increased our estimate of public sector net borrowing (PSNB ex) in the first eleven months of the current financial year by £3.3 billion to £135.5 billion since publishing our February 2025 release. This change was because of regular monthly updates to our central government data.

We have reduced our previous estimate of central government receipts by £3.3 billion, while our estimate of total central government expenditure remains largely unchanged.

Our previous estimate of central government tax receipts reduced by £4.3 billion, largely because of a £2.1 billion reduction to our previous estimate of corporation tax receipts, combined with a £1.9 billion reduction to our previous estimate of income tax receipts. This reduction in tax receipts was partially offset by a £0.9 billion increase to our previous estimate of receipts from National Insurance contributions.

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 debt at the end of February 2025

We have increased our estimate of public sector net debt (PSND ex) at the end of February 2025 by £5.0 billion to £2,800.8 billion since publishing our February 2025 release. Of this change, £3.3 billion was because of monthly updates to our Bank of England data, which are reported one month in arrears.

The remaining £1.7 billion revision to debt was because of improvements to our estimation of the monthly profile of the local government debt. This improvement has not changed the quarterly values themselves.

Revisions to gross domestic product

We updated our latest estimates of monthly gross domestic product (GDP) in March 2025 to include the GDP quarterly national accounts, UK: October to December 2024, published on 28 March 2025, and the Office for Budget Responsibility's Economic and fiscal outlook - March 2025 report, published on 26 March 2025. These changes had a negligible effect on the debt ratio at the end of February 2025, published in our February 2025 release.

Our blog, How the ONS estimates UK debt to GDP figures, explains why our estimates of GDP ratios 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 only 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 methodological guide and 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.

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.

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 - October 2024 report.

The Economic and fiscal outlook - March 2025 report will be fully reflected in our estimates from May 2025. However, in advance of May, this report has been used to inform the latest VAT and onshore corporation tax receipts estimates.

Changes to National Insurance contributions

The UK government announced changes to the National Insurance contributions paid by employers in the Autumn Budget 2024. This change comes into effect from 6 April 2025.

Support payments to Ukraine

On 1 March 2025, the Chancellor of the Exchequer announced a £2.26 billion aid package to Ukraine under the G7 Extraordinary Revenue Acceleration (ERA) scheme.

The funding will be delivered in three broadly equal annual payments, with the first payment of £757 million made to Ukraine in March 2025. 

Pending a full classification assessment, initial loans under the ERA are provisionally recorded in our Public sector finances, UK: March 2025 release, published on 23 April 2025. Under our provisional recording:

• public sector net debt will initially increase incrementally with the loan liability as the staged payments are made to Ukraine, reflecting a decrease in the stock of liquid assets arising from the cash payment

• public sector net financial liabilities are unaffected by these payments because it recognises both the loan liability, and the equal and offsetting loan asset owed to the UK

• public sector net borrowing and current budget deficit are unaffected, pending the recording of any interest receivable on the loan.

Further information is available in our Economic statistics classifications and developments in public sector finances: March 2025 article.

Local government

Local government data for the financial year ending (FYE) March 2025 are 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 2024 and £1.4 billion in FYE 2025.

Public corporations

Data for public corporations in FYE 2024 and FYE 2025 are 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.

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.