UK Posts Surprise £1.8bn Budget Deficit in July, Piling Pressure on Chancellor Healey

The Office for National Statistics reported on 21 August 2026 that UK public sector net borrowing came in at £1.8 billion in July, confounding economist forecasts of a balanced month and defying the Office for Budget Responsibility's projection of a £500 million surplus. The shortfall was £0.7 billion higher than July 2025 and £2.3 billion above the OBR's forecast. Central government spending on social benefits rose £2 billion year-on-year and spending on goods and services rose £1.2 billion, outpacing a record £17.1 billion in self-assessed income tax receipts. Cumulative borrowing for the financial year to July reached £56.7 billion, £6.0 billion lower than the same period last year but £2.3 billion above the OBR's forecast, while public sector net debt stood at 94.1% of GDP, just under £3 trillion. Chancellor John Healey said 'fiscal discipline is the bedrock of our UK economic stability,' reaffirming his fiscal rules ahead of his first Budget on 28 October.