Public sector finances UK December 2025 - Slight Improvement

23rd January 2026

Borrowing - the difference between total public sector spending and income - was £11.6 billion in December 2025; this was £7.1 billion or 38.0% less than December 2024 and the 10th highest December since monthly records began in 1993 (not adjusted for inflation).

Borrowing in the financial year to December 2025 was £140.4 billion; this was £0.3 billion or 0.2% less than in the same nine-month period of 2024, but still the third-highest April to December borrowing on record (not adjusted for inflation), after those of 2020 and 2024.

Borrowing in the financial year to December 2025 was provisionally estimated at 4.6% of gross domestic product (GDP); this was 0.2 percentage points less than in the same nine-month period of 2024.

The current budget deficit - borrowing to fund day-to-day public sector activities - was £5.8 billion in December 2025; this brings the total current budget deficit in the financial year to December 2025 to £94.9 billion, which is £1.6 billion or 1.6% less than in the same nine-month period of 2024.

Public sector net debt excluding public sector banks - a measure of the amount of money owed to the UK private sector and overseas less any liquid assets held - was provisionally estimated at 95.5% of GDP at the end of December 2025; this was 0.9 percentage points more than at the end of December 2024 and remains at levels last seen in the early 1960s.

Public sector net financial liabilities excluding public sector banks - which considers a wider range of financial assets and liabilities than net debt - were provisionally estimated at 85.0% of GDP at the end of December 2025; this was 2.5 percentage points more than at the end of December 2024, but 10.5 percentage points less than for public sector net debt.

Central government net cash requirement (excluding UK Asset Resolution Ltd and Network Rail) - the additional cash needed to be raised from the financial markets to finance activities - was £14.5 billion in December 2025; this was £4.9 billion or 25.2% less than in December 2024.

Borrowing in December 2025
Initial estimates show that the public sector spent more than it received in taxes and other income in December 2025, requiring it to borrow £11.6 billion. This was £7.1 billion, or 38.0%, less than in December 2024.

Public sector net borrowing is the sum of its current budget deficit and its net investment.

The current budget, which is usually in deficit, can be considered as borrowing to fund day-to-day public sector activities. This is the difference between its current receipts from taxes and other sources and its current expenditure on running public services, grants and administration.

The current budget deficit was £5.8 billion in December 2025, which was £4.8 billion (or 45.3%) less than in December 2024.

Public sector net investment comprises acquisitions less disposals of capital assets (gross fixed capital formation), less the depreciation of capital assets, plus capital grants to the private sector, less capital grants from the private sector.

Net investment was £5.8 billion in December 2025, which was £2.3 billion (28.3%) less than in December 2024. A £1.7 billion capital transfer was paid to the private sector in December 2024 as part of a repurchase of military dwellings from Annington Homes. There was no such payment in December 2025.

Read the full ONS report HERE