Chancellor John Healey has missed key government borrowing targets ahead of his inaugural Budget. The Office for National Statistics (ONS) reported that borrowing in August was £18.3bn, which was about £3.5bn higher than the prediction from the Office for Budget Responsibility (OBR) and also exceeded market forecasts.
The ONS also stated that the public sector current budget deficit was above the fiscal watchdog's forecast. This brings the total borrowing to fund day-to-day government spending to £51.9bn for the current financial year. Public sector debt remained below £3 trillion at the end of August 2026.
ONS analysts attributed increased government spending in August to the impacts of inflation. Debt interest payments also rose to £8.8bn, adding pressure to the government's budget. The Chancellor faces challenges in meeting fiscal targets as the Budget approaches on October 28.