Public sector finances, UK: July 2024

• Borrowing - the difference between public sector spending and income - was £3.1 billion in July 2024, £1.8 billion more than in July 2023 and the highest July borrowing since 2021.

• Self-assessed income tax (SA) receipts in July 2024 were £12.9 billion, £1.1 billion more than in July 2023; however, because of the possibility of delayed July payments, we recommend considering July and August SA receipts as a whole when making year-on-year comparisons.

• Borrowing in the financial year to July 2024 was £51.4 billion, £0.5 billion less than in the same four-month period a year earlier but the fourth highest year-to-July borrowing since monthly records began in January 1993.

• Public sector net debt excluding public sector banks was provisionally estimated at 99.4% of gross domestic product (GDP) at the end of July 2024; this was 3.8 percentage points more than at the end of July 2023, and remains at levels last seen in the early 1960s.

• Excluding the Bank of England, debt was 91.9% of GDP, 4.9 percentage points more than at the end of July 2023 but 7.5 percentage points lower than the wider debt measure.

• Public sector net worth excluding public sector banks was in deficit by £739.9 billion at the end of July 2024, a £123.3 billion larger deficit than at the end of July 2023.

• Central government net cash requirement (excluding UK Asset Resolution Ltd and Network Rail) was £29.6 billion in July 2024, £19.6 billion more than in July 2023; in July 2024, the redemption of an index-linked gilt increased central government net cash requirement by around £14.5 billion.

The public sector spent more than it received in taxes and other income in July 2024, requiring it to borrow £3.1 billion, the highest July borrowing since 2021.

Initial estimates for July 2024 suggest that borrowing was £1.8 billion higher than July last year, and £3.0 billion higher than the £0.1 billion forecast by the Office for Budget Responsibility (OBR).

In July and January, accrued receipts are usually high because of receipts from self-assessed income taxes (SA). These additional receipts reduce borrowing, which is generally low in July.

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 HM Revenue and Customs, the Department of Health and Social Care, the Department for Education, and the Ministry of Defence.

The relationship between central government's receipts and expenditure is an important determinant of public sector borrowing. In July 2024, central government borrowed £16.5 billion, £1.9 billion more than in July 2023.

Central government receipts

Central government's receipts were £91.0 billion in July 2024, £1.7 billion more than in July 2023. Of this £1.7 billion increase in revenue:

• central government tax receipts increased by £2.1 billion to £71.2 billion, with increases in Income Tax, Corporation Tax and Value Added Tax (VAT) receipts of £1.7 billion, £0.3 billion and £0.2 billion, respectively

• compulsory social contributions decreased by £1.1 billion to £13.8 billion, largely because of the reductions in the main rates of National Insurance in 2024

In July 2024, SA receipts were £12.9 billion, which is £1.1 billion more than in July 2023 but £0.7 billion less than the £13.6 billion forecast by the OBR.

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

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

Central government expenditure

Central government spending data for July 2024 are provisional. There is uncertainty around these estimates until more detailed departmental information becomes available later in the year.

Central government's total expenditure was £107.4 billion in July 2024, £3.5 billion more than in July 2023. Of this overall £3.5 billion increase in spending:

• net social benefits paid by central government increased by £2.7 billion to £25.9 billion, largely because of inflation-linked benefits uprating

• central government departmental spending on goods and services increased by £1.3 billion to £35.7 billion, as inflation and pay rises increased running costs

• payments to support the day-to-day running of local government increased by £2.4 billion to £13.9 billion; being both central government spending and a local government receipt, these intra-government transfers have no impact on overall public sector borrowing

• central government net investment decreased by £1.6 billion to £17.2 billion, partly because of regular payments from HM Treasury to the Bank of England Asset Purchase Facility Fund (APF), which decreased by £2.1 billion compared with a year earlier; being both central government spending and a Bank of England receipt, these intra-public sector transfers have no impact on overall public sector borrowing but do affect our public sector net borrowing excluding the Bank of England (PSNB ex BoE) measure 

• interest payable on central government debt decreased by £1.0 billion to £7.0 billion, largely because the interest payable on index-linked gilts rises and falls with the Retail Prices Index (RPI)

Interest payable on central government debt

In July 2024, the interest payable on central government debt was £7.0 billion. This was the second highest interest payable in any July since records began (for this component), in 1997.

The large monthly changes in the RPI since early 2021 led to volatility in debt interest payable, with the largest three months on record occurring in 2022 and 2023. The additional interest caused by RPI inflation is described as "capital uplift" and affects the value of the gilt principal.

Capital uplift was £2.0 billion in July 2024, largely reflecting the 0.4% increase in the RPI between April and May 2024. This increased the capital uplift on the three-month lagged index-linked gilts (as shown on the UK Debt Management Office website), which make up over 90% of the index-linked gilt stock.

A monthly time series of capital uplift on the index-linked gilts in issue is available as series identifier code JNYY. This series is illustrated as the blue portion of each bar in Figure 2 and 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 £3.1 billion borrowed in July 2024, combined with a downward revision of £1.5 billion to our previously published financial year-to-June 2024 borrowing estimate, brings our provisional estimate for the total borrowed in the financial year to July 2024 to £51.4 billion.

This was £0.5 billion less than was borrowed in the same four months last year, but £4.7 billion more than the £46.6 billion forecast by the Office for Budget Responsibility for this period.

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.

Of the £51.4 billion borrowed by the public sector (excluding public sector banks) in the financial year to July 2024, central government borrowed £79.2 billion. This larger central government borrowing was partially offset by a £15.9 billion Bank of England (BoE) surplus and balanced by remaining subsectors.

The borrowing of both subsectors is affected by payments totalling £23.6 billion made by central government to the BoE in this period under its Asset Purchase Facility Fund (APF) indemnity agreement.

As with similar intra-public sector transactions, these payments are public sector borrowing neutral. They increase central government's borrowing by £23.6 billion compared with the same period the previous year but reduce the borrowing impact of the BoE by an equal and offsetting amount.

Central government receipts

Central government’s receipts were £325.9 billion in the financial year to July 2024, £5.8 billion (1.8%) more than in the same period last year. Of this £5.8 billion increase in revenue:

• central government tax receipts increased by £8.2 billion to £249.9 billion, with increases in Income Tax, Corporation Tax and Value Added Tax (VAT) receipts of £3.5 billion, £2.4 billion and £1.9 billion, respectively

• compulsory social contributions decreased by £4.8 billion to £53.5 billion, largely because of the reductions in the main rates of National Insurance in 2024

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

Central government expenditure

Central government spending data for the early part of the financial year are provisional, and there is uncertainty around these estimates until more detailed departmental information becomes available later in the year.

Central government’s total expenditure was £405.2 billion in the financial year to July 2024, £8.7 billion (2.2%) more than in July 2023. Of this overall £8.7 billion increase in spending:

• net social benefits paid by central government increased by £6.8 billion to £101.9 billion, largely because of inflation-linked benefits uprating

• central government departmental spending on goods and services increased by £6.2 billion to £139.7 billion, as inflation increased running costs

• payments to support the day-to-day running of local government increased by £4.9 billion to £54.2 billion; being both central government spending and a local government receipt, these intra-government transfers have no impact on overall public sector borrowing

• subsidies paid by central government decreased by £3.4 billion to £9.3 billion, largely because of the closure of the energy support schemes that remained active until June 2023

• interest payable on central government debt decreased by £6.7 billion to £32.3 billion, largely because the interest payable on index-linked gilts rises and falls with the Retail Prices Index (RPI)

• central government net investment increased by £1.3 billion to £44.4 billion, and includes the regular payments from HM Treasury to the Bank of England APF Fund, which decreased by £0.5 billion compared with a year earlier; being both central government spending and a Bank of England receipt, these intra-public sector transfers have no impact on overall public sector borrowing but do affect our public sector net borrowing excluding the Bank of England (PSNB ex BoE) measure 

Local government

Initial estimates suggest that local government was in surplus by around £10.9 billion in the four months to July 2024, a £4.4 billion larger surplus 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, and with estimates included for Northern Ireland.

The public sector borrowed £120.3 billion in the financial year ending (FYE) March 2024. This was £8.1 billion less than the £128.5 billion borrowed in the FYE March 2023 but £6.2 billion more than the £114.1 billion forecast by the Office for Budget Responsibility (OBR).

This is our fifth provisional estimate of borrowing for the FYE March 2024. This estimate is £0.3 billion lower than our initial estimate of £120.6 billion published in the March 2024 release.

Our borrowing estimate for the FYE March 2024 remains provisional; it is likely to be revised further over the coming months as we replace our provisional estimates of both receipts and expenditure with finalised data.

Public sector borrowing consists of two broad components: the current budget deficit (or borrowing to fund day-to-day activities) and net investment (capital expenditure).

In the FYE March 2024, the public sector current budget deficit was £49.5 billion, £33.1 billion less than in the FYE March 2023, while net investment increased by £25.0 billion to £70.9 billion over the same 12-month period.

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 robust measure for comparison of the UK's fiscal position over time.

Our fifth provisional estimate for the total borrowed in the financial year ending (FYE) March 2024 as a ratio of GDP is 4.4%, which is unchanged from our initial estimate of 4.4% published in the March 2024 release.

Our article The use of GDP in public sector fiscal ratio statistics, describes the methodology used for the presentation of our GDP ratios.

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 upon 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, which we explain in our Wider measures of the public sector balance sheet: public sector net worth methodology.

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

Public sector net debt

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

The net debt-to-GDP ratio at the end of July 2024 was provisionally estimated at 99.4%, 3.8 percentage points higher than a year ago. However, this is a highly provisional estimate and is likely to be revised in future publications because it partly relies on GDP estimates based on the March 2024 Office for Budget Responsibility forecast.

Public sector net debt excluding the Bank of England (BoE) was £2,540.3 billion at the end of July 2024, or around 91.9% of GDP, which is £205.6 billion (or 7.5 percentage points of GDP) less than the wider measure. This difference is largely a result of the BoE's quantitative easing activities, including the gilt-purchasing activities of the Asset Purchase Facility (APF) Fund.

The APF's gilt holding is not recorded directly as a component of public sector net debt. Instead, in July 2024, we recorded the £99.9 billion difference between the £690.4 billion of reserves created to purchase its gilts (at market value at the time of purchase) and their £590.5 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 worth

Public sector net worth excluding public sector banks (PSNW ex) was in deficit by £739.9 billion at the end of July 2024. This compares with a £616.6 billion deficit at the end of July 2023.

The £123.3 billion reduction in PSNW ex over the last 12 months was largely because of a £165.3 billion increase in debt (PSND ex), partly offset by a £40.2 billion increase in public sector non-financial assets. 

If we exclude the public sector's £1,613.3 billion of non-financial assets, public sector net financial worth excluding public sector banks (PSNFW ex) reduced by £163.5 billion over the same period to a deficit of £2,353.2 billion.

Our Public sector net worth: Appendix O dataset, released on 21 June 2024, presents the balance sheet for the public sector consistent with the 2010 European system of national accounts (ESA 2010) (PDF, 6.4MB) and eurostat's Manual on Government Deficit and Debt (MGDD). This dataset is updated quarterly, depending on the availability of data.

The data for the latest months of every release contain a degree of forecasts. Subsequently, these are replaced by improved estimates, as further data are made available, and finally by outturn data.

Tables 4 to 6 of our Public sector finances summary tables: Appendix M dataset compare our latest public sector finances data with those in our Public sector finances, UK: June 2024 bulletin, published on 19 July 2024, and highlight the revisions to borrowing by subsector, with additional detail for central government receipts and expenditure.

Our Public sector finance revisions analysis: Appendix P dataset records monthly borrowing data as at first and at subsequent publications, graphically illustrating any potential bias to our early estimates.

Revisions to public sector net borrowing in the financial year to June 2024

Since publishing our June 2024 release, we have reduced our estimate of borrowing (PSNB ex) in the first quarter of the financial year by £1.5 billion to £48.3 billion. This change was largely the result of regular updates to our central government data.

Since our last publication, we have increased our previous estimate of central government tax receipts by £2.0 billion, with value added tax (VAT) and corporation tax receipts increasing by £1.2 billion and £0.6 billion, respectively.

This change was accompanied by an increase to our estimate of total central government spending of £0.5 billion spread across several spending categories. However, the change is largely a result of an increase of £0.9 billion to our previous estimate of debt interest payable.

Central government spending data for the early part of the financial year are largely provisional. There is a degree of uncertainty around these estimates until more detailed departmental information becomes available later in the year.

Revisions to public sector net borrowing in the financial year to March 2024

Since publishing our June 2024 release, we have reduced our estimate of borrowing (PSNB ex) in the 12 months to March 2024 by £1.8 billion to £120.3 billion.

This month, we have aligned most of our tax and other HM Revenues and Customs (HMRC) receipts data to those published in the HMRC annual report and accounts: 2023 to 2024 corporate report. In doing so, we have increased overall central government tax receipts by £1.2 billion, national insurance contributions by £0.3 billion, and fines by £0.3 billion.

Revisions to public sector net debt (PSND ex) at the end of June 2024

Since publishing our June 2024 release, our estimate of debt at the end of June 2024 remains largely unchanged at £2,740.0 billion.

Revisions to gross domestic product

We have updated our previous estimate of gross domestic product (GDP) for the first quarter of the financial year ending (FYE) March 2025 with that published in our GDP first quarterly estimate, UK: April to June 2024 bulletin on 15 August 2024.

This month, our headline ratios remain largely unchanged, as the published GDP figure for the final quarter of the FYE 2024 was marginally more than our previous estimate.

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 (or public sector banks). The figures presented in this release exclude public financial corporations unless otherwise noted.

Public sector current budget deficit

Public sector current budget deficit (PSCB) is the gap between current expenditure and current receipts on an accruals basis, having taken account of depreciation. 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 revenue 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. This is sometimes referred to as the "headline debt".

Unless otherwise noted, the debt figures quoted in this bulletin exclude public sector banks (PSND ex), while the UK government's legislated fiscal target has been based on a measure that excludes both public sector banks and the Bank of England (PSND ex BoE). This is sometimes referred to as the "underlying debt".

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. 

Public sector net worth

Public sector net worth (PSNW) is the widest measure of the balance sheet, broadening the PSNFL measure by considering the public sector's non-financial assets.

Upcoming data updates in September 2024 

In September 2024, we will implement many of our regular annual data updates to incorporate the latest available data. This includes data updates for student loans, the Bank of England, National Non-Domestic Rates, public corporations' data based on the Whole of Government accounts, Pool Reinsurance (Nuclear) Limited, and Network Rail. We expect to make further regular annual data updates in the subsequent months. 

Additionally, we will introduce improvements to our recording of central government interest. These changes are discussed in our Economic statistics classifications and developments in PSF statistics: June 2024 article, which highlights the expected impact of the updates on our headline statistics. These expected impacts are provisional and may change between now and September 2024, as we are continuing to work on these changes. 

Bank of England 

In September 2021, our Recent and upcoming changes to public sector finance statistics: August 2021 article explained improvements to our estimates of the Bank of England's contribution to our public sector measures. 

In the coming months, we aim to include additional monthly data from the Bank of England, which will replace further instances where published annual data are used. These more frequent data will be used to provide more precise monthly estimates of the contribution of the Bank of England to the public sector finance aggregates. For more information on this development, see Section 2: Short-term developments of our Looking ahead - developments in public sector finance statistics article.  

Comparing our data with official forecasts 

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 - March 2024 report.  

On 29 July 2024, the Chancellor of the Exchequer announced that the autumn Budget will take place on 30 October 2024. The OBR will publish an updated set of forecasts on the same day.

Each month on the same day as the Office for National Statistics (ONS) release, the OBR publishes a brief analysis of the latest public sector finances in its Monthly public finances release. Additionally, the OBR has published an article providing A brief guide to the public finances. 

Tax receipts 

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 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 reflect the expectations published in the Office for Budget Responsibility's (OBR's) Economic and fiscal outlook - March 2024 report. 

Each summer we align our in-year estimates of tax and other HM Revenue and Customs (HMRC) receipts to those published in the HMRC annual report and accounts.  

In August 2024, HMRC advised that annual VAT receipts for the financial year ending (FYE) March 2023 and the FYE March 2024 have not been aligned to their annual accounts while ongoing assurance is carried out. VAT receipts over this period should be treated as provisional. 

We will provide a further update once these processes have finished. 

Local government and public corporations 

Local government data for the financial year ending March 2025 are provisional estimates for the UK, largely based on published budget data for England, Scotland and Wales, and 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 include adjustments to increase or decrease the amounts reported at the budget stage. 

For the FYE March 2024, we include: 

• a £3.0 billion upward adjustment to England's current expenditure on goods and services 

• a £1.2 billion upward adjustment to England's capital expenditure 

• a £0.5 billion downward adjustment to Wales's capital expenditure 

• a £0.5 billion downward adjustment to Scotland's capital expenditure 

We apply a further £0.9 billion downward adjustment to budget data for current expenditure on benefits in the FYE 2024, to reflect the most recently available data for housing benefits.  

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

Methodology guides 

To supplement this release, we publish an accompanying methodological guide and Quality and Methodology Informationoutlining the strengths, limitations, and appropriate uses of government finance statistics. 

In addition, we 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 article 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 worth and net financial liabilities 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 September 2023, these were called "experimental statistics". Read more about the change in our guide to official statistics in development.