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UK government borrowing rose in September to its highest level for that month in five years, as higher debt interest payments and increased departmental spending continued to weigh on the public finances, figures from the Office for National Statistics showed Tuesday. Public sector net borrowing, excluding public sector banks, stood at £20.2 billion in September, up £1.6 billion, or 8.6%, from a year earlier. This marked the highest September borrowing since 2020, the ONS said. The figure, however, came below the FXStreet-cited consensus of £20.5 billion, but was slightly above the Office for Budget Responsibility’s March forecast of £20.1 billion. For the financial year to September, borrowing totalled £99.8 billion, up £11.5 billion, or 13%, from the same period last year and the second-highest April-to-September total since monthly records began in 1993. The current budget deficit, which covers day-to-day spending, rose 21% on the year to £13.4 billion in September. Debt interest costs jumped £3.8 billion to £9.7 billion, as inflation-linked gilt payments were pushed up by movements in the Retail Prices Index. Central government spending increased £8.1 billion, or 9.8%, to £90.6 billion, reflecting higher pay and inflation-related costs, as well as increases in benefit and pension payments. Tax receipts rose £3.6 billion to £63.1 billion, led by gains in income tax, value-added tax and corporation tax, while social contributions grew £3.2 billion following April’s rise in employer National Insurance rates. Public sector net debt, excluding public sector banks, was provisionally estimated at 95.3% of gross domestic product at the end of September, up one percentage point from a year earlier and remaining near levels last seen in the early 1960s. The central government net cash requirement, a measure of the cash needed to cover deficits, was £15.9 billion in September, nearly 20% higher than a year before. The ONS noted that this month’s figures included a revision to VAT receipts following a correction announced by HM Revenue & Customs on October 8. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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