PwC comments on ONS Public Sector Finance data - April 2026

Commenting on the latest ONS public sector finance data, Nabil Taleb, economist at PwC UK, says:

“Public sector net borrowing came in at £12.6bn in March 2026, £1.4bn less than was recorded in March last year and the lowest March borrowing since 2022. At the close of the financial year, borrowing was estimated at £132.0bn, down 13% on last year and broadly in line with the OBR’s forecasts.

“Debt interest payments reached £3.2bn in March, £1.3bn less than a year ago. The lower figure largely reflects the 0.5% decrease in the Retail Price Index (RPI) from the start of the year. Higher debt servicing costs as a share of total revenues leave the public finances more exposed to future economic shocks.

“Amid the conflict in the Middle East, the outlook for the UK is set to become more challenging. Growth forecasts from the IMF and OECD have been downgraded, while higher energy costs are set to keep inflation elevated into next year. Interest rate cuts discussed earlier in the year now look unlikely and could give way to further increases. A more stagflationary backdrop is forecast to take shape, with speculation already building about the impact of weaker growth on the Chancellor’s headroom. Recent moves in bond markets, with gilt yields briefly touching 5% for the first time since 2008 before easing, also highlight the UK’s vulnerability to uncertainty.”