UK Debt Hits $4.01 Trillion as Inflation Rate Jumps

22/10/2026 04:18 AST

Britain's government borrowed more than expected again in September and public debt surpassed £3 trillion ($4.01 trillion), according to official data that underscored finance minister John Healey's challenge in his first budget next week.

Borrowing hit £24.52 billion last month, pushed up by spending on debt interest. A Reuters poll of economists had pointed ?to a deficit ?of £23.85 billion in the month.

Over the first six months of the 2026/27 financial year, the shortfall stood at £97.8 billion, down by £4.4 billion from a year earlier but above the ?forecast of £91.8 billion made by the Office for Budget Responsibility before the Iran war began.

Healey is expected to raise taxes on banks among other measures on October 28 in order to stay on track to meet his fiscal rules.

However, his margin for error is expected to have narrowed sharply in large part ?due ?to the rise in borrowing costs for government debt around the world since the start of the conflict in the Gulf.

Wednesday's data showed public sector debt was estimated to have exceeded £3 trillion for the first time. However, as a proportion of the economy, debt was lower than a year earlier, the Office for National Statistics said.

Britain's annual inflation rate also accelerated by more than expected in September, rising to 3.5 percent on elevated energy prices, official data showed.

The Consumer Prices Index jumped from a rate of 3.1 percent in August, the Office for National Statistics said.

Analysts' consensus forecast had been for inflation to reach 3.4 percent in September.

Asharq Al Awsat