PwC comments on Public Sector Finance data - October 2026

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

"Public sector net borrowing came in at £24.5bn in September 2026, £1.8bn higher than a year earlier and £1.9bn above the OBR forecast, making it the second-highest September on record. While borrowing in the financial year to date was around 4.3% lower than at the same point last year, it remained £6.0bn above the OBR’s forecast.

"Debt interest payments reached £10.9bn in September, £1.5bn higher than a year earlier and the highest recorded for any September. Higher debt servicing costs absorb a greater share of government revenues, reducing fiscal room and leaving the public finances more exposed to future economic shocks.

"Looking ahead to the Budget, the Chancellor will have to navigate a difficult fiscal landscape, working within the confines of the government’s self-imposed fiscal rules while managing its spending plans as borrowing costs remain high and fiscal headroom comes under pressure. Departmental spending pressures are also significant, with the IFS estimating that maintaining their spending power while meeting higher defence commitments is likely to require funding beyond the expected fiscal headroom. The key question is therefore not simply how much headroom remains, but how resilient that buffer is when higher borrowing costs and spending pressures are taken into account."