Public sector borrowing hits £20.2 billion in highest September figure since Covid: "The UK is on the verge of being repossessed"

PUBLIC sector borrowing has hit £20.2 billion in the highest September figure since Covid with one expert saying "the UK is on the verge of being repossessed".

Borrowing – the difference between total public sector spending and income – was £20.2 billion in September 2025, according to official data published this morning.

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.

Grant Fitzner, Chief Economist at the Office of National Statistics (ONS), said: “Last month saw the highest September borrowing for five years. Debt interest, the cost of providing public services and benefits all increased compared with last year, more than offsetting the rise in receipts from central government taxes and National Insurance contributions. Likewise, the first six months of the financial year saw the highest overall deficit since 2020.”

Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, said “if the UK were a property, it would be on the verge of being repossessed”. 

He added: "That's how dire the situation has become. If the government applied for a mortgage, it would fail miserably on affordability, with no clear means of repayment, coupled with a worsening credit file. 

"Without its own self-certified route of borrowing, the government would have bankrupted the UK and had to go to the IMF soup kitchen, just like Labour did 50 years ago."

Adam Stiles, Managing Director at London-based Helix Financial Partners, fears that Chancellor Rachel Reeves will raise taxes next month.

He added: “What's the definition of insanity? Doing the same thing over and over and expecting different results. Yet Rachel Reeves will of course continue to raise taxes in her Doom Budget in November and this seems to be the only economic theory she believes. It doesn't work. There is black and white economic data showing this.”

Daniel Hobbs, CEO at Rayleigh-based New Leaf Distribution, sounded the alarm for the economy.

He said: “The public finances appear to be totally out of control and we could be in for a fiscal nightmare when the Budget is announced next month. This country is now officially on red alert.”

Chris Barry, Director at London-based Thomas Legal, said the UK is in a “difficult place”.

He continued: “This makes for grim reading. Borrowing is growing in the lead up to the Budget and is projected to grow in the months following the Budget. The ONS have projected borrowing will reduce slightly in 2027 and 2028 but this may be giving the government too much credit. 

"In order to grow GDP, money will have to be created and therefore the UK’s debt interest payment will continue to grow, creating a spiral at these levels. High borrowing at relatively high interest rates is impossible to reverse with very little growth in GDP. The country is currently in a very difficult place.”

Scott Gallacher, Director at Leicester-based Rowley Turton, predicted that the triple lock on pensions could be at risk.

He added: "These figures are shocking yet not surprising. The Government can’t tax its way out of this crisis — rising debt costs are swallowing up revenue, and without growth soon, Labour may have little choice but to implement significant spending cuts. 

“In that case, even pensioners could be at risk, with the State Pension triple lock potentially on the chopping block.”

David Stirling, Independent Financial Adviser at Belfast-based Mint Wealth Ltd, added: "The Treasury’s overdraft is swelling, as these new figures show public borrowing ballooned to £20.2 billion in September, pushing the six-month total close to £100 billion.

"This is a number not seen since the Covid pandemic and shows Britain is living beyond its means and the government is spending like it's 2020 again."