This morning’s ONS release estimates that borrowing in the first two months of 2026-27 totalled £46.3 billion. This is £8.9 billion above the same period last year and £7.7 billion above the monthly profile consistent with our March forecast. The current overshoot against the forecast is mainly driven by central government spending, which is £4 billion above profile. Of this, £2.4 billion is due to higher debt interest spending largely driven by the increase in inflation due to the conflict in the Middle East. Most of the remaining areas of spending data are highly provisional this early in the year. Central government receipts outturn data, which tends to be less subject to future revisions, is relatively close to profile in the year to date, at just £0.9 billion lower than expected.
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Inflation increases debt interest costs compared to forecast
19 June 2026 | Monthly public finances release
This morning’s ONS release estimates that borrowing in the first two months of 2026-27 totalled £46.3 billion. This is £8.9 billion above the same period last year and £7.7 billion above the monthly profile consistent with our March forecast. The current overshoot against the forecast is mainly driven by central government spending, which is £4 billion above profile. Of this, £2.4 billion is due to higher debt interest spending largely driven by the increase in inflation due to the conflict in the Middle East. Most of the remaining areas of spending data are highly provisional this early in the year. Central government receipts outturn data, which tends to be less subject to future revisions, is relatively close to profile in the year to date, at just £0.9 billion lower than expected.