UK government borrowing in the financial year ending (FYE) March 2026 has been initially estimated at £132 billion — £700 million less than had been forecast by the UK’s Office for Budget Responsibility (OBR).

That’s according to latest figures from the UK’s Office for National Statistics (ONS), which said the UK’s public sector net debt excluding public sector banks (PSND-ex) has reached £2.91 trillion.

£132 billion is the sixth-highest amount borrowed by the UK in any financial year since records began in 1947.

The UK’s current £2.91 trillion of debt is provisionally estimated at 93.8% of GDP for the end of March 2026. This was 0.6 percentage points more than in March 2025 and remains at levels last seen in the early 1960s.

Interest payable on UK central government debt increased by £12.2 billion to £97.6 billion for the year “largely because the interest payable on index-linked gilts rises and falls with the Retail Prices Index.”

In March 2026 alone, UK borrowing was £12.6 billion — £1.4 billion less than in March 2025.

The £132 billion borrowed by the UK in the year to March 2026 was £19.8 billion or 13.1% less than the amount borrowed by the UK in the prior year.

Ruth Gregory, deputy chief UK economist at Capital Economics, said: “We do not expect this improvement to last long. We think the energy price shock will mean that borrowing overshoots the OBR’s forecast by a huge £29bn for the 2026-27 fiscal year and by about £13bn in subsequent years.”

Joe Nellis, economic adviser at MHA, the accountancy and advisory firm, said: “The UK posted a £12.6bn deficit in March – a figure that, while broadly in line with what was expected, delivers a stark warning to the Government: tax revenues are not keeping up with public expenditure, and forecasts for growth suggest that this isn’t changing any time soon.

“Total borrowing for the financial year now stands at over £130 billion, threatening the sustainability of the Chancellor’s fiscal rules. The reality is that economic growth remains too weak to ease the pressure. The economy received a welcome boost in February, registering 0.5% month-on-month growth, but this followed a period of minimal growth and is before the impacts of the conflict in the Middle East filter into the economy.

“The tax base is stagnating, as inadequate growth leaves government revenues lagging dangerously. Meanwhile, spending pressures are not waiting. Health costs continue to rise and pensions are increasing year-on-year. Debt interest remains a heavy burden, only worsened by the rise in UK gilts since the beginning of March.

“These are not temporary issues – they are structural. The idea that borrowing will fall steadily in the coming years looks increasingly optimistic unless the economic backdrop improves materially.

“Fixing the UK’s growth prospects requires long-term reform, but that won’t bring overnight results. If the Chancellor wants to maintain fiscal stability, she will have to make decisions that affect the Government’s finances in the immediate term.”