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"Welcome to broken Britain", as public sector net borrowing soars to £18 billion in August

ended 19. September 2025

EXPERTS have warned the UK is “a completely broken economy” after new data showed borrowing had skyrocketed.

Borrowing – the difference between total public sector spending and income – was £18 billion in August 2025, £3.5 billion more than in August 2024 and the highest August borrowing for five years, according to official data published this morning. 

Borrowing in the financial year to August 2025 was £83.8 billion, £16.2 billion more than in the same five-month period of 2024 and the second highest April to August borrowing since monthly records began in 1993, after that of 2020.

The current budget – borrowing to fund day-to-day public sector activities – was £13.6 billion in August 2025. 

This brings the total current budget deficit in the financial year to August 2025 to £62 billion, which is £13.8 billion more than in the same five-month period of 2024.

Grant Fitzner, Chief Economist at the ONS, said: "Last month's borrowing was the highest August total since the pandemic. Although overall tax and National Insurance receipts were noticeably up on last year, these increases were outstripped by higher spending on public services, benefits and debt interest. Total borrowing for the financial year to date was also the highest since 2020." 

David Belle, Founder and Trader at Fink Money, sounded the alarm for the UK.

He said: "We are a completely broken economy. That's the sole takeaway from this data. This government is borrowing the same as we had to during the economic emergency of the pandemic. That is quite the stat. 

"The problem is they're borrowing at rates that are abnormally high. The 10-year gilt yield trades at fifty basis points (0.5%) higher than the G7 peer average. This is the most on record. And when did this start? When Labour was elected. There are considerable issues with our institutions. 

"Not only do they fund unproductive activity at an increasingly alarming rate, but the Bank of England's strategy is similarly broken, whereby quantitative tightening lifts the government's cost of borrowing through Bank of England active gilt sales. 

“They have reduced the envelope as of yesterday's meeting to £70bn, but this will not be enough to contain gilt yields continuing higher as inflation is now entrenched. Welcome to broken Britain.”

Harry Mills, Director at London-based Oku Markets, said the figures are awful for Chancellor Rachel Reeves.

He added: "This is terrible news for the Chancellor, who needs a lifeline ahead of her delayed November Budget. 

"One such lifeline could be the Bank of England's (BoE) decision to reduce its level of quantitative tightening from £100 billion over the past twelve months to £70 billion over the next year.”

Riz Malik, Director at Southend-on-Sea-based R3 Wealth, said Britain is on its last legs.

He said: "This is so bad that the next of kin should be notified. Yet more evidence of the fact this country is currently in a very bad way. 

“The Budget is in a few months' time and the raid on your cash and assets seems inevitable. The Chancellor will not only be going for your pockets, at this rate she will be shaking your sofa for loose change.”

Colin Low, Managing Director at Ipswich-based Kingsfleet, said the amount of borrowing is off the scale.

He added: “These numbers are almost beyond comprehension. They are so enormous that we struggle to understand what they mean. This breaks down to the UK borrowing over £24 million every hour in August. 

"If this was a business and I was their bank manager, they would be called in for stern words and yet, our politicians continue to turn a blind eye to this lack of financial control. With the Budget approaching, we should not expect any favourable outcomes with data like this.”

Anita Wright, Chartered Financial Planner at Ribble Wealth Management, said the warning signs are “flashing red”.

She continued: "The latest borrowing figures paint a stark picture of the UK’s economic and fiscal outlook. Government debt servicing costs are spiralling to the point where we are now effectively borrowing to pay interest on past borrowing — akin to taking out a new credit card to cover the interest on an old one. 

"Movements in the Retail Price Index continue to add volatility, making the burden of servicing inflation-linked debt even more unpredictable. With gilt yields persistently elevated, debt costs consuming record shares of revenue, and substantial off-balance-sheet liabilities in areas such as public sector pensions, the underlying fiscal position is far weaker than headline figures suggest. 

"Political consensus remains fractured, and policy credibility is under scrutiny from global investors. The warning signs are flashing red: the UK risks edging into a genuine debt crisis, where spiralling borrowing costs threaten the long-term sustainability of the public finances."
 

8 responses from the Newspage community

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Editor
Riz Malik
Independent Financial Adviser at R3 Wealth
This is so bad that the next of kin should be notified. Yet more evidence of the fact this country is currently in a very bad way. The Budget is in a few months' time and the raid on your cash and assets seems inevitable. The Chancellor will not only be going for your pockets, at this rate she will be shaking your sofa for loose change.
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Editor
Scott Gallacher
Director at Rowley Turton
Despite higher taxes, government borrowing is still rising, and further tax hikes alone will not solve the UK’s worsening fiscal position. While revenues have increased, these gains have been outweighed by higher spending on public services, welfare, and debt interest. More than a year into office, the government’s growth agenda has yet to deliver tangible results, leaving the public finances moving in the wrong direction. Simply raising taxes further is not a sustainable solution — what’s needed is a credible plan for growth.
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Rob Mansfield
Independent Financial Advisor at Rootes Wealth Management
The blackhole keeps getting bigger. Uncontrolled government spending that's outpacing tax rises, combined with faltering growth equals a blackhole being funded by increasingly expensive debt. With ineffective opposition and government backbenchers calling for more spending, tax rises feel inevitable yet they'll put more pressure on growth so the debt doom cycle is powering up.
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Editor
Anita Wright
Chartered Financial Planner at Ribble Wealth Management
The latest borrowing figures paint a stark picture of the UK’s economic and fiscal outlook. Government debt servicing costs are spiralling to the point where we are now effectively borrowing to pay interest on past borrowing — akin to taking out a new credit card to cover the interest on an old one. Movements in the Retail Price Index continue to add volatility, making the burden of servicing inflation-linked debt even more unpredictable. With gilt yields persistently elevated, debt costs consuming record shares of revenue, and substantial off-balance-sheet liabilities in areas such as public sector pensions, the underlying fiscal position is far weaker than headline figures suggest. Political consensus remains fractured, and policy credibility is under scrutiny from global investors. The warning signs are flashing red: the UK risks edging into a genuine debt crisis, where spiralling borrowing costs threaten the long-term sustainability of the public finances.
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Editor
Sam Alsop-Hall
Chief Strategy Officer & Co-Founder at Clive Henry Group
Britain isn’t managing its finances anymore. It is maxing out the nation’s credit card and calling it policy. We are not in an economic cycle, we are in an economic spiral, and this level of borrowing is nothing short of a confession that the government has lost control of the country’s finances. Every hour of inaction drives us deeper into the ground, leaving the next generation to pick up the bill.
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David Belle
Founder and Trader at Fink Money
We are a completely broken economy. That's the sole takeaway from this data. This government is borrowing the same as we had to during the economic emergency of the pandemic. That is quite the stat. The problem is they're borrowing at rates that are abnormally high. The 10-year gilt yield trades at fifty basis points (0.5%) higher than the G7 peer average. This is the most on record. And when did this start? When Labour was elected. There are considerable issues with our institutions. Not only do they fund unproductive activity at an increasingly alarming rate, but the Bank of England's strategy is similarly broken, whereby quantitative tightening lifts the government's cost of borrowing through Bank of England active gilt sales. They have reduced the envelope as of yesterday's meeting to £70bn, but this will not be enough to contain gilt yields continuing higher as inflation is now entrenched. Welcome to broken Britain.
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Colin Low
Managing Director at Kingsfleet
These numbers are almost beyond comprehension. They are so enormous that we struggle to understand what they mean. This breaks down to the UK borrowing over £24 million EVERY HOUR in August! If this was a business and I was their bank manager, they would be called in for stern words and yet, our politicians continue to turn a blind eye to this lack of financial control. With the budget approaching, we should not expect any favourable outcomes with data like this.
Copy

Harry Mills
Director at Oku Markets
UK government borrowing was far higher than expected in August, at £18bn. This was nearly double the 2025 monthly average and the highest August borrowing since the pandemic. This is terrible news for the Chancellor, who needs a lifeline ahead of her delayed November Budget. One such lifeline could be the BoE's decision to reduce its level of quantitative tightening from £100bn over the past twelve months to £70bn over the next year. Whilst there's some nuance in the balance between passive and active QT - allowing bonds to mature and rolloff versus active selling - HMT indemnifies the BoE for losses on its bond purchases, so avoiding crystallising losses due to higher yields means a few billion - or more - spared for the Chancellor.