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Borrowing rose by a fifth compared with August 2025 with £18.3 billion borrowed in August 2026

ended 22. September 2026

Borrowing rose by around a fifth compared with August 2025, as spending increased more than government income from taxes and other receipts, partly reflecting the impacts of inflation, new figures showed.

Borrowing – the difference between total public sector spending and income – was £18.3 billion in August 2026. This was £2.9 billion (19%) more than in August 2025 and £3.5 billion above the Office for Budget Responsibility (OBR) forecast.

Borrowing was £77.3 billion in the financial year (FY) to August 2026. This was £2.2 billion (2.7%) less than in the same period last year but £8.1 billion above the OBR forecast.

Self-assessed (SA) Income Tax receipts in July and August 2026 combined were £18.6 billion, £1.9 billion more than in the same period last year.

  • Is it worrying that we are above the OBR forecast for borrowing?
  • Tax receipts are higher, but borrowing is higher. What is your reaction?
  • How will this affect the UK economy?

Responses asap.

6 responses from the Newspage community

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Manooch SureeVerified
Director at Zinga Financial Services
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The fact that Government is bringing in more tax, but borrowing is still higher than expected, which shows just how much pressure the public finances are under. If that continues, it leaves the Chancellor with less room to manoeuvre and could mean tougher decisions on tax and spending. There could also be a knock on effect for mortgages if higher borrowing puts upward pressure on gilt yields and market rates, potentially slowing the pace at which mortgage rates come down.
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Michelle LawsonVerified
Director at Lawson Financial
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The runaway train just keeps going down the same track but with a different driver. Spending is out of control and the highest it’s been. Rather than the tax rises being used to help balance the books as we’ve been told, it seems it has just been so the government can just keep haemorrhaging the cash. The track will run out soon, the same as public patience and confidence - people have had enough.
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Samuel Mather-HolgateVerified
Managing Director & IFA at Mather and Murray Financial
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This is the deficit roaring back into the headlines. Tax receipts are up, but the state is still spending faster than the money is coming in, with debt interest and inflation-linked departmental costs doing real damage. Being £3.5bn above the OBR forecast in a single month is not a rounding error — it is a warning light. The UK is now borrowing heavily even with a record tax burden, which leaves the economy boxed in: less room for tax cuts, less room for investment and more pressure on future Budgets. The danger is a slow fiscal squeeze where households pay more, businesses hold back and growth remains stuck in the mud.
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Chris BarryVerified
Director at Thomas Legal
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Labour can no longer blame the tories for the countries high tax, low growth economy. Their own policies have failed to improve the position and the economic landscape is now worse by a considerable margin. The effects are being felt by ordinary people through borrowing costs and the general day to day running of housing costs such as heating and food shopping. As the cost of running a household increases, people look to readjust their budget and expectations. We are seeing buyers delay their plans to move and instead wait to see if things improve.
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Paul DenleyVerified
CEO at Oakham Wealth Management
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Borrowing £8bn above the OBR’s forecast five months into the year is not a crisis, but it is a warning. Receipts are doing their job: self assessment is up nearly £2bn, while fiscal drag keeps pulling more people into higher tax bands. The problem is that spending is rising faster than the Treasury can tax. Inflation lifts both sides of the ledger: index linked debt interest, benefits and public sector pay are repriced upwards, while the Chancellor’s fiscal headroom is not. The risk is what the Budget does with that. Missing the OBR forecast makes tax rises in October more likely and gives gilt investors another reason to demand a premium for lending to the UK. That feeds into mortgage rates and business borrowing costs. Growth helps, but cannot solve this alone. The Government must choose between spending restraint and higher taxes; neither is painless.
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Anita WrightVerified
Chartered Financial Planner at Ribble Wealth Management
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Borrowing overshooting the OBR forecast in one month is worrying, but not surprising. The pattern is an old one: tax receipts rise, yet spending rises faster, and inflation quietly pushes up both. Self assessment receipts were up and still the gap widened. So the problem is not the tax base. It is the structure of the state's finances. Debt is sustained by cash flow. When the government's bills grow faster than its income, the only fix is more borrowing, and at today's gilt yields every new pound borrowed costs more to service than the one it replaces. That is a doom loop, not a forecasting error. For the wider economy it means higher gilt yields, a weaker pound over time and less room for growth as interest costs crowd out everything else. Gilt markets are patient until, suddenly, they are not. The lesson of 2022 was that the tolerance is thinner than Westminster assumes.