UK Borrowing Overshoots Forecasts by £8.1bn, Tax Rises "Virtually Inevitable"

UK public sector borrowing reached £18.3bn in August, £3.5bn above Office for Budget Responsibility forecasts, pushing the fiscal year-to-date deficit to £77.3bn — £8.1bn higher than projected, the Office for National Statistics said on September 22, 2026. Total national debt rose to £2.985tn, approaching £3tn. Debt interest hit a record £8.8bn for any August since 1997, bringing year-to-date servicing costs to £50bn, £2bn above March forecasts. Economists at RSM UK, Investec and Capital Economics said tax increases are "virtually inevitable" in the Chancellor's October 28 Budget, with Capital Economics estimating £9bn-£14bn in new revenue is needed to restore fiscal headroom. Sterling fell 0.1% to $1.336. The FTSE 100 edged up 0.2%, with BP and Shell declining on lower oil prices after Iran signaled possible reopening of the Strait of Hormuz.