UK debt tops £3 trillion as September borrowing overshoots ahead of Budget
UK public debt passed £3 trillion for the first time as September borrowing of £24.5bn overshot forecasts, a week before Chancellor John Healey's first Budget.
The UK government borrowed £24.5 billion in September, £1.8 billion more than a year earlier and £1.9 billion above the Office for Budget Responsibility’s forecast (https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicsectorfinance/bulletins/publicsectorfinances/september2026). A Reuters poll had pointed to a £23.85 billion deficit (https://www.reuters.com/world/uk/uk-borrows-more-than-expected-again-debt-hits-3-trillion-2026-10-21/).
Debt interest costs were the main driver: the government paid £10.9 billion in interest, £1.6 billion more than a year earlier and the highest September figure since records began in 1997 (https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicsectorfinance/bulletins/publicsectorfinances/september2026). Of that, £4 billion reflected inflation uplift on index-linked gilts.
Over the first six months of the 2026/27 financial year, the deficit stood at £97.8 billion — down £4.4 billion on the same period last year but £6 billion above the OBR forecast, which was made before the Iran war began (https://www.reuters.com/world/uk/uk-borrows-more-than-expected-again-debt-hits-3-trillion-2026-10-21/).
Public sector net debt provisionally exceeded £3 trillion for the first time, at £3,005.0 billion at the end of September — 94.0% of GDP, 0.7 percentage points lower than a year earlier but at levels last seen in the early 1960s (https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicsectorfinance/bulletins/publicsectorfinances/september2026). Debt first passed £2 trillion in June 2020 during the pandemic, after exceeding £1 trillion in February 2010 following the financial crisis.
They land a week before Chancellor John Healey’s first Budget on 28 October, when he is expected to raise taxes on banks to stay on track for his fiscal rules (https://www.thetimes.com/business/economics/article/uk-inflation-and-borrowing-hits-highest-level-so-far-this-year-n7dqgvxcf). His margin for error has narrowed sharply amid rising global borrowing costs since the Gulf conflict began (https://www.reuters.com/world/uk/uk-borrows-more-than-expected-again-debt-hits-3-trillion-2026-10-21/). Healey said the Middle East and Ukraine wars were “hitting Britain and countries worldwide” (https://www.thetimes.com/business/economics/article/uk-inflation-and-borrowing-hits-highest-level-so-far-this-year-n7dqgvxcf).
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