OBR Confirms 2025-26 Borrowing Matches Forecast at £132 Billion

Office for Budget Responsibility reports initial full-year public sector net borrowing estimate aligns closely with March 2026 projections.

The government’s borrowing books are looking healthier than expected this morning, as official figures confirm the Treasury hit its spending targets almost exactly.

The Office for Budget Responsibility has announced that initial estimates for 2025-26 public sector net borrowing came in at £132.0 billion – remarkably close to their March 2026 forecast of £132.7 billion. That’s a difference of just £700 million on a budget worth over £130 billion.

View tweet from @OBR_UK

The Numbers Behind the Improvement

More encouraging still, this year’s borrowing sits £19.8 billion below the latest estimate for 2024-25 full-year borrowing. The OBR’s figures show borrowing has fallen from 5.2% of GDP (£153 billion) last year to 4.3% of GDP this year – the lowest level in six years.

The borrowing estimate remains provisional and subject to future revisions by the Office for National Statistics. Year-to-date borrowing for the first 11 months of 2025-26 totalled £125.9 billion, running £11.9 billion below the same period in 2024-25, driven by higher receipts partly offset by higher spending. However, these numbers aren’t set in stone yet.

What Comes Next

The OBR has published monthly profiles for receipts, spending and borrowing in 2026-27, which they’ll be monitoring closely against actual data as it comes in. Their March 2026 Economic and Fiscal Outlook forecasts further improvements, with borrowing expected to fall to just 1.6% of GDP (£59 billion) by 2030-31.

However, not everyone’s convinced this positive trend will continue. Capital Economics views the 2025-26 undershoot as temporary, forecasting a £29 billion overshoot in 2026-27 due to energy price shocks. The OBR itself acknowledges uncertainty, noting there’s a 60% chance of wide variance by 2030-31 given the delicate £1.5 trillion balance between receipts and spending.

The OBR’s Spring Forecast 2026 shows borrowing down nearly £18 billion versus their Autumn forecast, with headroom against the government’s stability rule now standing at almost £24 billion.

Source: @OBR_UK

Key Takeaways

Initial 2025-26 borrowing estimate of £132.0 billion matches OBR forecasts within £700 million

Borrowing has fallen £19.8 billion compared to 2024-25, dropping to lowest level in six years

Government maintains almost £24 billion headroom against fiscal rules, but future projections remain uncertain

What This Means for Kent Residents

Lower national borrowing helps support fiscal stability that directly affects Kent County Council’s funding through central government grants and formula-based allocations for local services. The potential £4 billion in reduced debt interest payments nationally next year could free up resources for Kent priorities like SEND support and NHS Kent and Medway services. Kent households may see indirect benefits through more stable council tax levels and maintained public transport funding, though residents should prepare for continued economic pressures as energy costs and inflation continue to affect household budgets across the county.

Source: @OBR_UK

Published: 23 April 2026

Source: @OBR_UK on X. This article has been researched and rewritten with editorial balance by Kent Local News.