Sharp fall in government borrowing in December, figures show
According to statistics, UK government borrowing fell sharply last month, due to increased income from taxes and higher National Insurance Contributions outweighing investment. The difference between public spending and tax income was £11. According to the Office of National Statistics (ONS), 6bn is the lowest figure in the nation. It is down £7. 1bn - 38 percent down from the previous December and lower than many economists' estimates, but it was still higher than that borrowed in the same month in 2023. The drop, according to Tom Davies, Deputy Director of ONS' public service division, was a result of "receipts being up soaring on last year, but spending is only modestly higher.
Despite the annual decline, the December 2025 figure was the tenth highest for the month since records began in 1993, without accounting for inflation. And it is still higher than December 2023, when borrowing stood at £8. 99. 1bn. The figures show the government received £7. 7bn more – an 8. In December 2025, the tax increase was 9% higher than it did in the same month in 2024. The ONS reported that this included increases in income tax, corporation tax, VAT, and National Insurance contributiONS (NIC), as well as changes to the rate of NIC paid by employers in April last year. As their paychecks increase, more people are being dragged
into paying tax, or more taxes, as a result of fiscal drag. Public expenditures in December also increased, partially due to an increase in inflation-linked health care. It was provisionally estimated to be £92. 9bn - £3. 2bn (3. 5%) more than in December 2024. However, this rise was more than outweighed by the increase in funds earned by taxes and NIC contributions. According to provisional estimates, borrowing during the financial year to December totalled £140. According to the ONS, the ONS reported that 4 billion people are less than the same period in 2024, down about £300 million less than The borrowing figure was estimated as 4. 6% of GDP - 0. The same period last year was down by two percentage points from the previous year. It was the third-highest level of borrowing over April-December on record, after those in 2020 and 2024. According to James Murray, the government was
We doubled our headroom last year and we are expected to cut borrowing more than every other G7 country,stabilizing the economy, lowering borrowing, and rooting out waste in the public sector.
presided over record borrowing outside of the pandemic.the pandemic's borrowing rate fell last year. Mel Stride, Labour's second year in a row, said the government had
he said, adding, "Only the Conservatives have a credible strategy to restore balance to the public budget.Our debt interest is almost double what we spend on defense,
According to the Office for Budget Responsibility (OBR), public borrowing between April and December was £4. 1bn (2. 8%) below its current forecast. The estimated increase in capital gains tax (CGT) receipts in January and the same month 2025 is expected, according to people selling assets in order to profit from lower rates ahead of proposed CGT tax hikes in the November Budget. Public budgets were
Ruth Gregory, deputy chief UK economist at Capital Economics, said.finally showing signs of improvement in recent months,
she said, adding aWhat's more, a further development in January is on the way,
bumper setof self-assessment tax and CGT receipts is expected.
she said.The big picture is that deficit reduction is still very slow,
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