What changed this month?

The government borrowed £1.8 billion in July 2026, the gap between what it spent and what it raised. July is usually one of the strongest months for receipts, because self-assessment income tax lands then, so the public finances came close to balance. Even so, borrowing was £0.7 billion higher than in July 2025 and £2.3 billion more than the OBR had forecast.

Why did borrowing move?

Spending grew faster than receipts. Central government spending rose £5.7 billion on the year while receipts rose £4.6 billion, so the gap widened even in a strong month for tax.

What happened to tax receipts?

Central government receipts were £104.3 billion, up £4.6 billion (4.6%) on July 2025, with VAT up 6.0%, income-related taxes up 5.9% and corporation tax up 7.7%. Self-assessment income tax brought in £17.1 billion, £1.7 billion more than a year earlier, though the ONS advises reading July and August together because some payments arrive late.

What happened to spending?

Central government spending was £110.7 billion, up £5.7 billion (5.4%) on the year. Net social benefits rose £2.0 billion and spending on goods and services rose £1.2 billion, both outpacing the growth in receipts.

What happened to debt interest?

Central government interest payable was £7.7 billion in July, £0.7 billion more than a year earlier. That is well below recent months, but the RPI-linked capital uplift on index-linked gilts still added £1.3 billion, reflecting a 0.2% rise in RPI between April and May 2026.

How does this compare with the OBR forecast?

Borrowing was £2.3 billion above the OBR's forecast for the month. For the financial year so far, borrowing of £56.7 billion is £6.0 billion lower than the same period last year but £2.3 billion above the OBR's forecast. Revisions in this release removed the overshoot previously reported for April to June, so July now accounts for the whole of the year-to-date gap. One month is a weak guide and figures are routinely revised.

Monthly update: July 2026

July is usually one of the strongest months for the public finances. Borrowing came close to balance, but it still ran above both last year and the official forecast.

Released 21 August 2026. provisional

What changed, and why

What changed this month?: The government borrowed £1.8 billion in July 2026, the gap between what it spent and what it raised. July is usually one of the strongest months for receipts, because self-assessment income tax lands then, so the public finances came close to balance. Even so, borrowing was £0.7 billion higher than in July 2025 and £2.3 billion more than the OBR had forecast.
Why did borrowing move?: Spending grew faster than receipts. Central government spending rose £5.7 billion on the year while receipts rose £4.6 billion, so the gap widened even in a strong month for tax.
What happened to tax receipts?: Central government receipts were £104.3 billion, up £4.6 billion (4.6%) on July 2025, with VAT up 6.0%, income-related taxes up 5.9% and corporation tax up 7.7%. Self-assessment income tax brought in £17.1 billion, £1.7 billion more than a year earlier, though the ONS advises reading July and August together because some payments arrive late.
What happened to spending?: Central government spending was £110.7 billion, up £5.7 billion (5.4%) on the year. Net social benefits rose £2.0 billion and spending on goods and services rose £1.2 billion, both outpacing the growth in receipts.
What happened to debt interest?: Central government interest payable was £7.7 billion in July, £0.7 billion more than a year earlier. That is well below recent months, but the RPI-linked capital uplift on index-linked gilts still added £1.3 billion, reflecting a 0.2% rise in RPI between April and May 2026.
How does this compare with the OBR forecast?: Borrowing was £2.3 billion above the OBR's forecast for the month. For the financial year so far, borrowing of £56.7 billion is £6.0 billion lower than the same period last year but £2.3 billion above the OBR's forecast. Revisions in this release removed the overshoot previously reported for April to June, so July now accounts for the whole of the year-to-date gap. One month is a weak guide and figures are routinely revised.

Monthly update: July 2026

Borrowing this month

What changed, and why