UK August budget deficit hits 18.3 billion pounds, exceeding forecasts; cumulative total also overshoots OBR projection
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The UK's public sector net borrowing for August came in at 18.3 billion pounds, according to data released by the Office for National Statistics on the 22nd, exceeding the 15.5 billion pounds expected by economists in a Reuters poll. The ONS also revised up borrowing for each of the past four months of the 2026/27 fiscal year, bringing the cumulative deficit for April through August to 77.3 billion pounds. While that is 2.2 billion pounds below the same period a year earlier, it is 8.1 billion pounds above the Office for Budget Responsibility's forecast. An ONS statistician explained that although tax receipts appeared strong, they were offset by increases in government spending on goods and services and in inflation-linked social security benefits. The deficit excluding investment flows came to a cumulative 51.9 billion pounds for April through August, above the OBR's forecast of 47.1 billion pounds. The government needs to balance this measure by the 2029/30 fiscal year. The situation is proving difficult for Chancellor Healey, who is preparing to deliver her first budget.