The UK government borrowed over £2billion more than expected in October, the latest figures have revealed.
Data from the Office for National Statistics (ONS) showed that borrowing - calculated as the difference between public spending and income from tax - was £17.4billion in October.
That figure, the BBC reports, is down from £19.2billion in October 2024, but still well above official forecasts.
Analysts had predicted government borrowing of £15billion in October, while the Office for Budget Responsibility's March estimate was just £14.4billion.
ONS chief economist Grant Fitzner said the £17.4billion figure was the "third-highest October figure on record in cash terms".
It comes just days before chancellor Rachel Reeves is due to unveil her autumn budget.
Professor Joe Nellis, economic adviser at MHA, an accountancy and business advisory firm with offices in Aberdeen, called the figures "sobering".
He said: "Public sector borrowing came in at £17.43billion for October, painting a challenging picture for the public finances and reinforcing the fiscal squeeze facing the Chancellor ahead of the Budget.
"Despite signs of improving economic momentum in some sectors and a fall in inflation, the UK’s fiscal position remains fragile, shaped by subdued growth, rising welfare pressures, and the ongoing impact of higher interest rates on government debt servicing.
"Today’s data show that borrowing for the year has risen compared with the same month last year, driven by a combination of three key factors: weaker-than-expected tax receipts, increased expenditure linked to inflation-indexed benefits, and another sizeable interest bill on index-linked gilts. While the headline numbers stop short of a fiscal shock, they underline the limited room for manoeuvre the Chancellor will have when setting out next week’s Budget measures.
"This is a sobering reminder of the fiscal reality confronting policymakers. The implications for the Budget are clear. Many government departments already operating under tight budgets are unlikely to see substantial relief, and any additional spending commitments will need to be highly targeted.
"It is imperative that the Chancellor prioritises long-term reforms aimed at boosting productivity and growth rather than relying on short-term stimulus. Without a stronger economic engine, the UK will continue to face difficult trade-offs between funding essential services and stabilising the fiscal position."
FTSE100
The UK's flagship share index, the FTSE 100, was down 117 points at 9,456 shortly after opening this morning.
Brent crude oil futures were down 1.21% at $62.27 a barrel.
Companies reporting:
- Babcock International Group - Half Year Results