PwC comments on Public Sector Finance data - September 2026

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

"Public sector net borrowing came in at £18.3bn in August 2026, £2.9bn higher than a year earlier and £3.5bn above the OBR forecast, making it the second-highest August on record. While borrowing in the financial year to date was around 2.7% lower than at the same point last year, it remained £8.1bn above the OBR’s forecast.

"Debt interest payments reached £8.8bn in August, £0.7bn higher than a year earlier and the highest recorded for any August. 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.

“A better near-term borrowing outturn would help, but it would not remove the pressure created by higher government borrowing costs. Thirty-year gilt yields recently reached their highest level since 1998, which matters because it raises the cost of long-term financing at a time when fiscal room is already tight. While higher gilt yields do not feed through into debt interest costs immediately, they make it harder for improvements in the monthly borrowing figures to translate into lasting fiscal headroom. For the Budget, that leaves the government relying not just on better borrowing data, but on some easing in borrowing costs as well.”