Overview

• Public sector borrowing for the year ending March 2025 totaled £151.9bn, £14.6bn higher than the OBR's spring forecast and £20.7bn more than the previous year.
• Debt now stands at 95.8% of GDP, the highest level since the early 1960s, reflecting long-term fiscal strain on the UK economy.
• Key drivers of the borrowing overshoot include inflation-linked increases in public sector pay and benefits, alongside weaker-than-expected tax revenues.
• The IMF recently downgraded the UK's economic growth forecast, citing global trade tensions and domestic inflation, further complicating fiscal recovery efforts.
• Economists warn that Chancellor Reeves may need to consider tax hikes or spending cuts in the autumn budget to adhere to self-imposed fiscal rules.