Ons figures reveal UK borrowing exceeded forecasts in November as economic pressure mounted pre-budget

Britain’s public finances came under renewed strain in November as government borrowing exceeded market expectations, highlighting the fragile state of the economy in the weeks leading up to the autumn budget delivered by Rachel Reeves.

Figures published by Office for National Statistics showed public sector net borrowing reached £11.7bn last month. While this was £1.9bn lower than in November a year earlier, it still surpassed City forecasts, which had anticipated a deficit of around £10bn.

The data marked the first official snapshot of the public finances since Reeves set out her tax and spending plans on 26 November. Despite signs of improvement compared with last year, economists warned that the figures underscored the scale of the challenge facing the new chancellor as she seeks to stabilise the government’s finances.

Tom Davies, a senior statistician at the ONS, said November’s borrowing was the lowest for the month in four years, even as overall spending increased. He attributed the year-on-year improvement largely to stronger tax receipts and higher national insurance contributions.

However, Davies cautioned that the broader picture remained concerning. Borrowing across the financial year to date is higher than last year, reflecting persistent pressures on the public purse despite recent gains in revenue.

Between April and November, the government borrowed £132.3bn. That figure is £10bn higher than during the same eight-month period in 2024 and represents the second-highest total for this point in the year on record, exceeded only during the height of the Covid pandemic in 2020.

Economists said the November overshoot could complicate Reeves’s efforts to meet the Office for Budget Responsibility’s forecasts for borrowing in the coming years. Matt Swannell, chief economic adviser at the EY Item Club, warned that the government may need to take tougher action to rein in the current budget deficit.

He said borrowing would need to fall much more sharply over the coming months than it did last year if ministers are to stay on track with their fiscal plans.

The borrowing figures arrived a day after the Bank of England cut interest rates for a sixth time since August last year, offering some relief to households and businesses. The rate cut was widely seen as a pre-Christmas boost for an economy that has struggled to regain momentum.

Economic activity slowed sharply in the run-up to the budget, as uncertainty over potential tax changes weighed on consumer spending and business investment. Official data showed that gross domestic product unexpectedly shrank in October, while the Bank of England has warned that growth is likely to flatline in the final quarter of the year.

The opposition seized on the borrowing figures as evidence of what it described as reckless fiscal management. Mel Stride, the shadow chancellor, said borrowing levels remained alarmingly high outside of the pandemic period and accused Labour of piling up debt through additional spending commitments.

In response, ministers pointed to measures announced in the budget aimed at restoring stability. James Murray, the chief secretary to the Treasury, said the government was committed to cutting debt and borrowing, noting that debt interest currently absorbs around £1 in every £10 of public spending.

He said the budget had increased headroom against the government’s main fiscal rule to £22bn, giving ministers more flexibility to respond to future economic shocks.

Rising revenues offered some reassurance. Compulsory social contributions increased by £3bn compared with last year, reaching £17.2bn in November, following changes to employer national insurance rates in April. For the year to date, these contributions totalled £131.2bn, up £21bn on the same period last year.

Spending pressures, however, remained intense. Net social benefit payments rose by £1.5bn to £26.8bn, driven by inflation-linked increases and the state pension triple lock. Public sector investment also climbed, partly due to a £1.6bn payment linked to the Hinkley Point C nuclear project.

Analysts warned that the figures underline how quickly fiscal concerns could return to the forefront of political debate. Elliott Jordan-Doak of Capital Economics said the data showed the public finances remained on shaky ground, despite the government’s efforts to shore up credibility.