Public sector finances, UK: September 2025

• Borrowing – the difference between total public sector spending and income – was £20.2 billion in September 2025; this was £1.6 billion (or 8.6%) more than in September 2024 and the highest September borrowing since 2020.
• Borrowing in the financial year to September 2025 was £99.8 billion; this was £11.5 billion (or 13.1%) more than in the same six-month period of 2024 and the second-highest April to September borrowing since monthly records began in 1993, after that of 2020.
• The current budget deficit – borrowing to fund day-to-day public sector activities – was £13.4 billion in September 2025; this brings the total current budget deficit in the financial year to September 2025 to £71.8 billion, which is £10.6 billion (or 17.2%) more than in the same six-month period of 2024.
• Public sector net debt excluding public sector banks was provisionally estimated at 95.3% of gross domestic product (GDP) at the end of September 2025; this was 1.0 percentage points more than at the end of September 2024 and remains at levels last seen in the early 1960s.
• Public sector net financial liabilities excluding public sector banks were provisionally estimated at 83.8% of GDP at the end of September 2025; this was 3.0 percentage points more than at the end of September 2024, but 11.5 percentage points less than for public sector net debt.
• Central government net cash requirement (excluding UK Asset Revolution Ltd and Network Rail) was £15.9 billion in September 2025; this was £2.6 billion (or 19.8%) more than in September 2024.

Initial estimates show that the public sector spent more than it received in taxes and other income in September 2025, requiring it to borrow £20.2 billion.

This was £1.6 billion (or 8.6%) more than in September 2024 and £0.1 billion (or 0.5%) more than the £20.1 billion forecast in March 2025 by the Office for Budget Responsibility.

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 £13.4 billion in September 2025; this was £2.3 billion (or 21.2%) more than in September 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 £6.9 billion in September 2025, which was £0.7 billion (or 9.6%) less than in September 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 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 and other government agencies.

The relationship between central government’s receipts and expenditure is an important determinant of public sector net borrowing. Of the £20.2 billion borrowed by the public sector in September 2025, central government borrowed £16.9 billion.

Central government current receipts

Central government’s current receipts were £86.2 billion in September 2025, £6.8 billion (or 8.6%) more than in September 2024. Of this £6.8 billion increase in income:

• central government tax receipts increased by £3.6 billion to £63.1 billion; this included increases of £1.3 billion in Income Tax, £1.0 billion in Value Added Tax and £0.7 billion in Corporation Tax receipts

• compulsory social contributions increased by £3.2 billion to £16.9 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 September 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 £90.6 billion in September 2025, £8.1 billion (or 9.8%) more than in September 2024. Of this £8.1 billion increase in spending:

• central government debt interest payable increased by £3.8 billion to £9.7 billion, with movements in the Retail Prices Index (RPI) adding volatility to the monthly debt interest costs

• central government departmental spending on goods and services increased by £2.6 billion to £38.3 billion, as pay rises and inflation increased running costs

• net social benefits paid by central government increased by £2.0 billion to £27.5 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 decreased by £1.1 billion to £10.0 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 costs

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

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 £9.7 billion interest payable on central government debt in September 2025 includes £2.7 billion of capital uplift. This largely reflects the 0.4% increase in the RPI between June and July 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.

Central government net investment

Central government net investment was £8.8 billion in September 2025, £2.0 billion more than in September 2024. This increase was largely because of capital grants paid to other subsectors of the public sector. Such grants are public sector borrowing neutral.

The public sector spent more than it received in taxes and other income in the financial year (FY) to September 2025. Provisional estimates show it borrowed £99.8 billion over the six-month period, £7.2 billion (or 7.8%) more than the £92.6 billion forecast by the Office for Budget Responsibility in March 2025.

Borrowing in the FY to September 2025 was £11.5 billion (or 13.1%) more than in the FY to September 2024 and the second-highest FY to September borrowing since monthly records began in 1993, after that of April to September 2020 during the coronavirus (COVID-19) pandemic period.

Of the £99.8 billion borrowed by the public sector in the FY to September 2025, the current budget deficit was £71.8 billion. This was £10.6 billion (or 17.2%) more than in the same six-month period a year ago. Public sector net investment increased by £1.0 billion (or 3.6%) to £28.0 billion over the same six-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 £99.8 billion borrowed by the public sector in the FY to September 2025, central government borrowed £99.4 billion, with many 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 net receipts

Central government’s current receipts were £523.7 billion in the FY to September 2025, £36.9 billion (or 7.6%) more than in the same six-month period a year ago. Of this £36.9 billion increase in income:

• central government tax receipts increased by £21.2 billion to £391.0 billion; this included increases of £11.6 billion in Income Tax, £3.7 billion in Value Added Tax (VAT) and £3.5 billion in Corporation Tax receipts
• compulsory social contributions increased by £15.9 billion to £97.8 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 £557.2 billion in the FY to September 2025, £47.3 billion (or 9.3%) more than in the same six-month period a year ago. Of this £47.3 billion increase in spending:

• central government departmental spending on goods and services increased by £19.6 billion to £228.9 billion, as pay rises and inflation increased running costs
• interest payable on central government debt increased by £14.4 billion to £59.5 billion, largely because the interest payable on index-linked gilts rises and falls with the Retail Prices Index
• net social benefits paid by central government increased by £9.5 billion to £162.8 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 increased by £0.4 billion to £76.1 billion; these intra-government transfers have no impact on overall public sector borrowing (PSNB ex)

Central government net investment

Central government net investment was £44.0 billion in the FY to September 2025, £11.9 billion less than in the same six-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 Fund, £16.1 billion less than in the same six-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 borrowing was £2.9 billion in the FY to September 2025. This was a £1.4 billion (or 85.7%) more than in the same period a year earlier. Our local government estimates for the FY to September 2025 are currently based on budget data for England, Scotland, and Wales, with estimates included for Northern Ireland.

Provisional estimates show the public sector borrowed £149.5 billion in the financial year ending (FYE) March 2025. This was the third-highest amount borrowed in any financial year since records began in the FYE March 1947.

The highest amount borrowed in any financial year was £310.9 billion in the FYE March 2021 during the coronavirus (COVID-19) pandemic, and the second highest was £159.6 billion in 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 that 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, which describes 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 September 2025 was provisionally estimated at 95.3%, 1.0 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.

Public sector net debt excluding the Bank of England (BoE) was £2,746.6 billion at the end of September 2025, or around 89.8% of GDP. This was £169.5 billion, or 5.5 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 September 2025, we recorded the £86.6 billion difference between the £558.1 billion of reserves created to purchase its gilts (at market value at the time of purchase) and their £471.5 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 £2,564.8 billion at the end of September 2025 and equivalent to an estimated 83.8% of GDP. This was £199.9 billion, or 3.0 percentage points, more than at the end of September 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 11.5 percentage points of GDP less than PSND ex, which stood at 95.3% of GDP at the end of September 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 September 2025.

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

Correction to Value Added Tax data

On 8 October 2025, HM Revenue and Customs reported an under-estimation of £2.4 billion in its Value Added Tax (VAT) cash receipts data for the period April to August 2025.

This error has been corrected. In isolation and on an accrued basis, this update has reduced our estimate of public sector net borrowing published in our Public sector finances, UK: August 2025 bulletin by £1.0 billion in the FYE March 2025 and by £2.0 billion in the financial year (FY) to August 2025.

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

We have reduced our provisional estimate of public sector net borrowing (PSNB ex) in the FY to August 2025 by £4.2 billion to £79.6 billion, since publishing our Public sector finances, UK: August 2025 bulletin.

Table 4 of our Public sector finances summary tables: Appendix M dataset presents the revisions to our previously published estimates of public sector net borrowing by sub-sector.

Central government

We have reduced our previous estimate of the central government net borrowing for the five months to August 2025 by £2.9 billion. Of this, £2.0 billion is because of the correction of the previous VAT under-estimation described above.

Our previous estimate of central government receipts has risen by £4.5 billion. Within this, we have increased our previous estimate of tax receipts by £4.1 billion. This includes our regular monthly updates, along with the £2.0 billion correction to the previous estimate of VAT receipts.

Over the same period, this increase in receipts data was partially offset by a £1.6 billion increase to our estimate of central government spending. This increase was spread across several categories, most notably an increase of £1.9 billion in current transfers to local government. Such transfers are public sector borrowing neutral as they are both central government spending and a local government receipt.

Tables 5 to 6 of our Appendix M dataset present the revisions to our previously published estimates of central government receipts and spending by component.

Local government

We have reduced our previous estimate of the local government net borrowing for the five months to August 2025 by £1.4 billion. This reduction was largely because of the £1.9 billion increase in current transfers from central government referenced above, partially offset by regular updates, including for estimates of local government spending on goods and services, which increased by £0.6 billion.

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

We have increased our provisional estimate of public sector net borrowing in the FY to March 2025 by £3.2 billion to £149.5 billion, since publishing our Public sector finances, UK: August 2025 bulletin.

Within this £3.2 billion increase to public sector net borrowing, a £0.7 billion reduction in central government net borrowing, largely because of the previously discussed correction to VAT data, was more than offset by a £3.9 billion increase to our estimate of local government borrowing.

Since our last publication, we have incorporated updated estimates for the current expenditure of local authorities in England for the financial year ending March 2025, published by the Ministry of Housing, Communities and Local Government.

This information has enabled us to improve our previously published estimates, most notably that of expenditure on goods and services (including staff costs), which we have increased by £4.1 billion over the 12-month period.

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

We have increased our estimate of public sector net debt (PSND ex) at the end of August 2025 by £1.2 billion to £2,910.6 billion, since publishing our Public sector finances, UK: August 2025 bulletin.

This increase was largely because of updates to data used to estimate the Bank of England’s contribution to debt, which are published one month in arrears.

Revisions to gross domestic product

This month, we have updated our previous estimates of nominal GDP with those published in our GDP quarterly national accounts, UK: April to June 2025 bulletin (30 September 2025).

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

Our estimate of public sector net debt as a ratio of GDP at the end of August 2025 reduced by 1.0 percentage points from 96.4% to 95.4% because of this update to GDP.

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”, 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 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.

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, 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 Economic and fiscal outlook – March 2025 report from Office for Budget Responsibility.

Value Added Tax data

On 8 October 2025, HM Revenue and Customs reported an under-estimation in its Value Added Tax (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 provide assurance on compliance with the Code of Practice for Statistics.

The ONS will report 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, scheduled for December 2025.

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 Office for Budget Responsibility’s (OBR) 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 provisional estimates for the UK. They are largely based on budget data England, Scotland and Wales, and with estimates included for Northern Ireland.

Local government data for the FYE March 2025 also remain provisional estimates for the UK. For local authorities in England, estimates for current expenditure are based on published first release data, while capital expenditure and receipts are based on published provisional data. Estimates for the devolved administrations are based on published budget 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. These adjustments include:

• a £2.4 billion upward adjustment to Scotland’s current expenditure, for the FYE March 2025
• a £0.5 billion downward adjustment to Wales’s capital expenditure, for the FYE March 2025
• a £2.0 billion upward adjustment to England’s current expenditure, for the FYE March 2026
• a £2.4 billion upward adjustment to Scotland’s current expenditure, for the FYE March 2026
• a £0.4 billion downward adjustment to Scotland’s capital expenditure, for the FYE March 2026

To reflect the most recently available data for housing benefits, we have applied a further £3.1 billion downward adjustment to current expenditure in the FYE March 2026. 

The UK's fiscal targets

The UK government has legislated for 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 has set a target to bring the current budget into surplus by the end of the FYE March 2030 – 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 show that the public sector current budget deficit was £75.8 billion in the FYE March 2025; this was £9.6 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 (or GDP) compared with the previous year.

Our latest figures show that PSNFL was provisionally estimated at 81.3% of GDP at the end of March 2025; this was 1.6 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 (EFO) – March 2025 report. The Autumn Budget 2025 will take place on 26 November 2025 and will be accompanied by the EFO – November 2025 report.