The government was expected to borrow around £14.8bn in August, according to the OBR, while the market consensus was around £15.6bn. Actual borrowing reached £18.3bn.

The Office for National Statistics (ONS) said government borrowing reached £18.3bn. The ONS said the public sector current budget deficit reached £51.9bn in the financial year to August.

It noted that public sector debt remained below the £3 trillion milestone at the end of August 2026. The data reflects the challenges facing Prime Minister Andy Burnham and Mr Healey in meeting fiscal targets as the Budget approaches on October 28. Analysts at the ONS said the impacts of inflation resulted in the increase in borrowing in August. 

CityAM reported that the Chancellor is currently exchanging forecasts and policy proposals with the independent fiscal watchdog.

Mr Healey also faces pressure to find funding for support for households and businesses facing higher costs, while rising gilt yields have increased government borrowing costs.

Capital Economics’ Ruth Gregory told the outlet that the figures created a “dismal picture” as the government “once again” borrowed more than expected.]

She said: “All this means after five months of the financial year borrowing is £8.1bn higher than the OBR forecast in March,” Gregory said. And we expect this overshoot to persist as real GDP growth weakens in the fourth quarter and the government announces further cost-of-living support.”