A presentational framework for the headline measures of Public
Sector Finance Statistics (net borrowing net cash requirement and
net debt) is explained in this release. This includes the reasons
for changes in net borrowing (deficit) and debt.
Public sector finances, UK:
December 2025
Chief Secretary to the Treasury, , said:
“Last year we doubled our headroom and we are forecast to
cut borrowing more than any other G7 country with borrowing
set to be the lowest this year since before the
pandemic. It cannot be right that £1 in every £10 we spend goes
on debt interest - which could be better spent on our
nurses, police officers and teachers - that's why we're
tackling it.
"We are stabilising the economy, reducing borrowing, rooting out
waste in the public sector and making sure that public services
deliver value for taxpayers' money."
Background:
- Borrowing this year is forecast to be the lowest in 6 years
as a share of GDP. It is forecast to fall in every year from 4.5%
in 2025-26 to 1.9% in 2030-31.
- Net financial debt (PSNFL) is forecast to be lower as a share
of GDP by the end of the forecast (2030-31) than today
(2025-26).
- Taken together the OBR's forecast shows government policy
will lead to a reduction in CPI inflation of 0.4 percentage
points this year.
- This is the biggest near-term reduction in inflation due to
government policy ever forecast by the OBR at a single fiscal
event, outside of a crisis.
