MercoPress. South Atlantic News Agency

UK public debt nears £3 trillion, equivalent to 93.8% of GDP

The figure is £78.5 billion higher than a year earlier, though its weight on the economy was 1.3 percentage points lower than in August 2025, reflecting a growing nominal GDP

The United Kingdom's public sector net debt reached £2,985.5 billion — close to £3 trillion, some US$4 trillion — at the end of August, equivalent to 93.8% of gross domestic product, according to figures published on Tuesday by the Office for National Statistics. The agency noted these are levels last seen in the early 1960s.

The figure is £78.5 billion higher than a year earlier, though its weight on the economy was 1.3 percentage points lower than in August 2025, reflecting a growing nominal GDP.

From the start of the financial year in April through August, the public sector borrowed £77.3 billion, 2.7% less than in the same period last year, but £8.1 billion above the Office for Budget Responsibility's forecast. That gap widened sharply: a month earlier it stood at £2.3 billion. The comparison comes five weeks before the UK budget, due on October 28.

In August alone, borrowing reached £18.3 billion, 19% more than a year earlier and £3.5 billion above the OBR's estimate. According to the ONS, the increase occurred because spending grew faster than revenue from taxes and other sources, partly because of inflation.

The government also paid £8.8 billion in debt interest in August, the highest figure on record for that month. Of that total, some £2.1 billion reflects the capital uplift on index-linked gilts, whose return moves with the Retail Prices Index, a mechanism that adds volatility to interest costs.

Not all indicators point the same way. Borrowing in the financial year to August equates to 2.5% of GDP, 0.2 percentage points lower than a year earlier, and is the tenth-lowest April to August period since comparable monthly records began in 1993.

Chief Secretary to the Treasury Emma Reynolds reaffirmed the Labour government's commitment to “maintaining fiscal discipline” while pursuing economic growth.

The figures frame the public spending debate running through Westminster. On September 9, Prime Minister Andy Burnham told the House of Commons his government would meet NATO's target of 3.5% of GDP by 2035, with an interim 3% goal, while Conservative leader Kemi Badenoch questioned the cost of the Chagos Islands agreement and argued a decade was too long to wait.