The Chancellor’s Budget woes deepened again today as figures showed Government borrowing surging ahead of forecasts.
The public sector borrowed £18.3billion last month, up around a fifth on August 2025, as rising tax revenues failed to keep pace with Labour’s spending.
That was around £3billion more than expected, and £3.5billion more than the Treasury’s OBR watchdog predicted.
Some £8.8billion went on interest payments for the debt mountain, which was hovering just below £3trillion.
The grim picture came as ministers brace for the impact of the latest spike in energy prices from the Middle East chaos.
Fears are mounting that John Healey will be forced to increase taxes again on October 28 in order to keep the books balanced and cover Andy Burnham‘s spending commitments.
The public sector borrowed £18.3billion last month, up around a fifth on August 2025, as rising tax revenues failed to keep pace with Labour’s spending
Fears are mounting that John Healey will be forced to increases taxes again on October 28 in order to keep the books balanced and cover Andy Burnham’s spending commitments
ONS senior statistician Tom Davies said: ‘Borrowing in the financial year so far was lower than over the same period last year.
‘However, it was higher than the official forecast, largely because central government borrowed more than anticipated.
‘On the month, borrowing was up by almost a fifth on last August, as spending increased more than government income, partly reflecting the impacts of inflation.’
Shadow Chancellor Andrew Griffith said: ‘Labour have lost control of the public finances.
‘They are borrowing so much they’ve overshot the OBR forecast by an extra £8 billion of debt.
‘It takes a rare fiscal incontinence to both have the highest tax take in history and see borrowing still shoot up.’
Spending outstripped Government revenues in August, even though they rose from last year
Debt interest costs rose to a new August high as markets price in more risk
Chief Secretary to the Treasury Emma Reynolds said: ‘Britain has huge potential to deliver good growth in every postcode, creating jobs, raising living standards and investing in the services people rely on. But we can only deliver that growth with fiscal discipline.
‘At a time when debt interest costs billions of pounds that could otherwise be spent on improving lives, we must always know where the money is coming from to pay for public services.
‘That is why we are committed to meeting our fiscal rules with a buffer against uncertainty, taking the tough decisions needed to keep the public finances on a sustainable path.’

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