UK government borrowing overshoots forecasts in October

21st Nov 2025 07:40

(Sharecast News) - The UK government borrowed more than expected in October, according to figures released on Friday by the Office for National Statistics.

Borrowing came in at £17.4bn, down £1.8bn on October 2024 but above expectations of £15bn.

It was also slightly higher than the Office for Budget Responsibility's forecast of £14.4bn and marked the third-highest October borrowing since monthly records began in 1993, after those of 2024 and 2020.

ONS chief economist Grant Fitzner said: "Borrowing this October was down on the same month last year, although it was still the third-highest October figure on record in cash terms.

"While spending on public services and benefits were both up on October last year, this was more than offset by increased receipts from taxes and National Insurance contributions."

Total borrowing in the year so far was £116.8bn, up £9bn on the same period a year earlier and the second-highest figure for April to October on record after that of 2020.

Nabil Taleb, economist at PwC UK, said: "This quarter's weak growth figures and another relatively disappointing set of public finances underscore how constrained the fiscal landscape has become. Some indicators are improving, inflation appears to have passed its peak and interest rate cuts are edging closer, but as we head into the Budget, these positives are overshadowed by the wider fiscal reality. Downgraded growth forecasts and high debt interest costs mean the Chancellor's fiscal headroom is all but exhausted.

"The key questions turn to how the Chancellor chooses to navigate these constraints: how much fiscal headroom she aims to rebuild, while honouring her commitments to have debt falling and not raise taxes on working people, and, crucially, what her long-term plan is to support public service and unlock economic growth. Falling interest rates will help the recovery, but fiscal credibility will hinge on setting out a plan that reassures markets and voters without undermining that emerging momentum."

Also released on Friday, separate figures from the ONS showed retail sales unexpectedly fell in October as consumers held back on spending ahead of the Black Friday sales.