Public sector net borrowing is running £8.1bn above the OBR's forecast this financial year, according to the Resolution Foundation. That leaves the Chancellor, John Healey, with less room ahead of the Budget on 28 October.
The think tank said on 22 September that borrowing was £18.3bn in August 2026. That is £3.5bn above the OBR forecast and the second-highest August on record after the pandemic. Borrowing in the financial year to August 2026 was £77.3bn.
The overshoot comes from spending, not tax. Receipts were £1.1bn above forecast in the first five months of the year, while central government spending was £6.3bn above forecast. The Resolution Foundation says £4.5bn of that extra spending was the effect of higher inflation on debt interest and net social benefits.
It also says conflict in the Middle East is likely to add £10bn to £15bn to borrowing in 2029-30. The fiscal rules bind in that year.