Overview

• The Office for National Statistics said recent public borrowing was overstated by about £3bn due to an error in VAT data.
• HM Revenue and Customs acknowledged the mistake and said VAT cash receipts for April to August 2025 have been increased by £2.4bn.
• Borrowing is now assessed to be £1bn lower for the fiscal year to March 2025 and £2bn lower for April to August 2025.
• August’s borrowing was revised to £17.7bn, still ahead of the Office for Budget Responsibility’s forecast but by a smaller margin than first reported.
• The ONS will incorporate the changes in its 21 October release, with the revision offering limited fiscal space as tax rises are still widely expected given the reported funding gap and an expected OBR productivity downgrade.