Budget 2026: what changed
The Chancellor's Budget on came with a new forecast from the Office for Budget Responsibility (OBR). This page sets out what that forecast changed, figure by figure, and says nothing about whether the policies are right.
Figures from the OBR, Economic and fiscal outlook, October 2026. Confidence: estimated
How to read these figures
Every figure on this page is an OBR forecast, not an outturn. Forecasts are revised at each fiscal event, and the OBR gives a 60 per cent chance that borrowing in 2031-32 lands anywhere between a surplus of 1.0 per cent of GDP and a deficit of 4.4 per cent. 'This year' means the financial year 2026-27, April 2026 to March 2027. The headroom figures are compared with Budget 2025, because that is when the fiscal rules were last formally assessed; the other comparisons are with the OBR's March 2026 forecast.
The one-paragraph version
The government has less room against its own borrowing rule than at the last Budget: £15 billion, down from £22 billion. Borrowing is higher than the OBR expected in March in every year of the forecast, mainly because debt interest costs more. Debt interest reaches £124 billion this year and £160 billion by 2031-32. Net debt peaks at 97.3% of GDP in 2028-29. Growth is slightly higher in 2026 than the OBR expected in March, and lower in 2027.
Headroom: the buffer against the fiscal rules
"Headroom" is the margin by which the government is forecast to meet its fiscal rules. There are two rules, so there are two margins. The OBR compares them with Budget 2025 (November 2025), when the fiscal rules were last formally assessed.
- Current budget in surplus in 2029-30
- Met by £15 billion, down from £22 billion. The OBR puts the chance of meeting this rule at 56%, down from 59%.
- Net financial liabilities falling as a share of GDP in 2029-30
- Met by £24 billion, unchanged.
Sources: OBR, Economic and fiscal outlook, October 2026, paragraphs 1.24 and 7.17; OBR, Economic and fiscal outlook, October 2026, paragraphs 1.25 and 7.17. Retrieved . Confidence: estimated
Borrowing
Borrowing is the gap between what the government spends and what it raises in a year. The OBR forecasts £133.2 billion (4.2% of GDP) this year, falling to £66.9 billion in 2030-31 and staying about there in 2031-32.
What changed: borrowing is higher than the March forecast in every year the OBR compares. The last column of the table shows by how much. The OBR says most of the change is higher debt interest.
| Year | £ billion | % of GDP | Change since March, £bn |
|---|---|---|---|
| 2025-26 | 134.3 | 4.4 | +1.6 |
| 2026-27 | 133.2 | 4.2 | +17.7 |
| 2027-28 | 112.0 | 3.4 | +15.5 |
| 2028-29 | 99.5 | 2.9 | +13.5 |
| 2029-30 | 73.8 | 2.1 | +10.4 |
| 2030-31 | 66.9 | 1.8 | +7.9 |
| 2031-32 | 68.3 | 1.8 | not given |
Source: OBR, Economic and fiscal outlook, October 2026, Tables A.9 and A.10 and paragraphs 1.17 to 1.18. Retrieved . Confidence: estimated
Debt interest
Debt interest is what the government pays each year on what it owes. The OBR forecasts £124 billion this year, rising to £160 billion in 2031-32, an average increase of about £7 billion a year.
What changed: before the Budget's own measures, debt interest this year was about £15 billion higher than the March forecast. The OBR says the main cause is higher inflation, which raises the cost of index-linked gilts. An index-linked gilt is a government bond whose payments rise with prices. See Interest costs for why the rate matters as much as the debt.
Source: OBR, Economic and fiscal outlook, October 2026, paragraphs 1.17 and 5.29. Retrieved . Confidence: estimated
Debt
Public sector net debt is the headline measure of what the government owes. The OBR forecasts it at 95.5% of GDP this year, peaking at 97.3% in 2028-29, then falling back to 95.6% in 2031-32. It is higher than the March forecast in every forecast year, by 0.7 percentage points this year and 0.6 points in the final year.
In cash, debt rises every year, from £3,082 billion this year to £3,695 billion in 2031-32, because each year's borrowing is added to it. The share of GDP can fall while the cash total rises, if the economy grows faster than the debt. Debt vs deficit explains the difference.
The government's debt rule does not use this measure. It uses public sector net financial liabilities (PSNFL), which also counts financial assets the government holds, such as student loans. PSNFL is lower: 83.2% of GDP this year, rising to 83.8% in 2027-28 and 2028-29, then falling to 81.7% by 2031-32. The rule asks only that it falls between 2028-29 and 2029-30.
| Year | Net debt, £bn | Net debt, % GDP | Change since March, points | PSNFL, % GDP |
|---|---|---|---|---|
| 2025-26 | 2,918 | 93.1 | -1.2 | 81.4 |
| 2026-27 | 3,082 | 95.5 | +0.7 | 83.2 |
| 2027-28 | 3,239 | 96.7 | +1.0 | 83.8 |
| 2028-29 | 3,384 | 97.3 | +1.0 | 83.8 |
| 2029-30 | 3,487 | 96.7 | +0.6 | 83.1 |
| 2030-31 | 3,583 | 95.9 | +0.8 | 82.3 |
| 2031-32 | 3,695 | 95.6 | +0.6 | 81.7 |
Source: OBR, Economic and fiscal outlook, October 2026, Table A.9 and paragraphs 1.22 and 6.25. Retrieved . Confidence: estimated
Growth
The OBR forecasts the economy to grow by 1.2% in 2026 (March forecast: 1.1%) and 1.0% in 2027 (March: 1.5%). The OBR puts the lower 2027 figure down to higher energy prices and interest rates. These are calendar years, not financial years.
Source: OBR, Economic and fiscal outlook, October 2026, Tables A.1 and A.2, paragraph 2.3. Retrieved . Confidence: estimated
The UK's figures on the EU's measures
The EU asks its members to keep the deficit under 3% of GDP and gross debt under 60%. On the OBR's figures, the UK is above both this year, and above the debt limit in every year of the forecast. The international comparison page has the figures, the measures and the country comparisons.
What this page does not cover
The individual tax and spending measures announced in the Budget. For those, see the Treasury's Budget 2026 document.
See also: the latest monthly update and the glossary.