UK Borrowing Runs £2.7 Billion Above Forecast in First Quarter of 2026–27

The Office for Budget Responsibility says public sector net borrowing reached £57.6 billion in the first three months of 2026–27, coming in £2.7 billion above its March forecast profile despite falling £3.7 billion below the same period last year.

The UK borrowed £57.6 billion in the first quarter of 2026–27, the figures show — £2.7 billion more than the Office for Budget Responsibility had projected in its March 2026 Economic and Fiscal Outlook. The OBR published its monthly commentary on the public finances after the Office for National Statistics released the latest public sector finances data, describing the gap as borrowing “slightly above forecast profile”.

Central government spending is running £3.6 billion above the forecast profile year-to-date, driven primarily by higher debt interest payments and higher net social benefits — such as welfare payments and pensions — than the March forecast assumed. The overshoot has actually narrowed compared with earlier in the year: after the first two months of 2026–27, borrowing stood at £46.3 billion, which was £7.7 billion above the forecast profile. By the end of the first quarter, that gap had closed to £2.7 billion.

Year-on-year, the picture is more favourable. Borrowing in the first three months of 2026–27 is £3.7 billion lower than in the equivalent period of 2025–26, when the full-year total came in at around £132.0 billion.

For Kent households and businesses, the effects are indirect but real. Kent County Council, Medway Council and district councils all rely on a mix of central government grants, council tax and business rates. If borrowing continues to run above the forecast profile, future governments may consider spending restraint or tax changes that could affect local authority funding settlements — including allocations for social care, transport, schools and NHS services within the Kent and Medway Integrated Care System. At present, the OBR’s own language is cautious: “slight” is the word it uses, and there are no immediate announced changes to local funding as a result.

But persistent deviations from forecast have a habit of shaping medium-term decisions. Higher debt interest costs — often tied to inflation and interest rates pushing up the cost of servicing index-linked government debt — are not easily reversed, and the OBR’s commentary flags this as a key driver of the current overshoot. The figures are also subject to revision as more complete data become available, meaning the gap relative to forecast could yet widen or narrow.