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Government Borrowing This Year

The UK government borrows approximately £88 billion per year — Public Sector Net Borrowing (PSNB) — to fund the gap between public spending and tax receipts, according to OBR forecasts and ONS Public Sector Finance statistics. This equates to approximately £241 million of borrowing every single day.

Government borrowing is the annual flow that adds to the stock of national debt. When the government spends more than it collects in taxes and other receipts, it must borrow the difference by issuing government bonds (gilts) in financial markets. The national debt is the accumulated stock of all past borrowing minus any repayments.

UK government borrowing peaked during the COVID-19 pandemic at approximately £322 billion in 2020/21 — the highest peacetime level on record — as the government funded the furlough scheme, business support, vaccine rollout and other emergency measures. Borrowing has since fallen significantly but remains elevated compared to pre-pandemic levels.

The OBR produces independent forecasts of government borrowing at each Budget and Autumn Statement. The fiscal rules set by the government commit to reducing borrowing as a share of GDP over a rolling five-year period and to having debt falling as a share of GDP by the fifth year of the forecast.

The interest cost of past borrowing — debt interest payments — is approximately £100 billion per year, itself a major constraint on government finances. Higher interest rates since 2021 have significantly increased debt servicing costs, as existing gilts mature and are refinanced at higher rates.

Source: Office for Budget Responsibility (OBR) / ONS Public Sector Finances · Data year: 2024/25 · All figures are statistical estimates calculated from official annual publications

How much does the UK government borrow each year?

The UK government borrows approximately £88 billion per year (Public Sector Net Borrowing) according to OBR forecasts for 2024/25. This equates to approximately £241 million per day or £10 million per hour. Borrowing peaked at approximately £322 billion in 2020/21 during the COVID-19 pandemic and has since fallen but remains above pre-pandemic levels.

Why does the UK government borrow money?

The UK government borrows when its spending exceeds its income from taxes and other receipts — this gap is called the budget deficit or Public Sector Net Borrowing. Borrowing allows the government to fund public services, infrastructure and welfare without raising taxes immediately. Government borrowing is financed by issuing gilts (government bonds) which are purchased by investors including pension funds, overseas governments and the Bank of England.

What are UK government fiscal rules?

The UK government's current fiscal rules commit to: reducing public sector net debt as a percentage of GDP by the fifth year of the OBR forecast period; reducing day-to-day spending (current budget) to balance over the same period; and keeping public sector net investment below 3% of GDP. The OBR independently assesses whether the government is on course to meet these rules at each fiscal event.