UK public debt exceeds £3 trillion for the first time — Asharq Al-Awsat

In the United Kingdom, public sector debt exceeded £3 trillion for the first time in September, or about $4.01 trillion. Annual inflation accelerated to 3.5% from 3.1% in August, according to official data reported by Asharq Al-Awsat.

Borrowing exceeded expectations

In September, the British government borrowed £24.52 billion. This was higher than the forecast of economists surveyed by Reuters, who expected a deficit of £23.85 billion. The volume of borrowing was affected by the cost of servicing public debt.

Over the first six months of the 2026/27 financial year, the deficit amounted to £97.8 billion. This was £4.4 billion less than during the same period a year earlier, but above the Office for Budget Responsibility's forecast of £91.8 billion.

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Inflation rose to 3.5%

According to the Office for National Statistics, the debt-to-economy ratio was lower than a year earlier despite exceeding the £3 trillion mark.

The consumer price index rose by 3.5% year-on-year in September, exceeding analysts' consensus forecast of 3.4%. Official data link the acceleration in inflation to high energy prices.

Finance Minister John Healey is expected to present his first budget on October 28 and may, among other measures, raise taxes on banks to comply with fiscal rules. According to the publication, the government's room for manoeuvre has narrowed because of rising costs of government borrowing worldwide since the start of the conflict in the Persian Gulf.