The UK government's public sector borrowing stood at £11.6 billion in December 2025, according to the latest data from the Office for National Statistics. This figure represents a significant reduction from the previous year, but still places the country among the highest borrowing periods on record.
Year-on-Year Improvement Amid Persistent Challenges
The December 2025 borrowing amount of £11.6 billion marks a substantial £7.1 billion decrease compared to December 2024, representing a 38% reduction. Despite this positive development, December 2025 still ranks as the tenth highest December borrowing figure since monthly records began in 1993, indicating that while progress has been made, the situation remains concerning from a historical perspective.
Financial Year Overview Reveals Mixed Picture
Looking at the broader financial picture, borrowing for the financial year to December 2025 reached £140.4 billion. This represents a marginal decrease of £0.3 billion, or 0.2%, compared to the same nine-month period in 2024. However, this remains the third-highest April to December borrowing on record, surpassed only by the exceptional figures of 2020 and 2024.
As a percentage of gross domestic product (GDP), borrowing in the financial year to December 2025 was provisionally estimated at 4.6%, which is 0.2% less than during the same period in 2024.
Current Budget Deficit Analysis
The current budget deficit, which represents borrowing specifically to fund day-to-day public sector activities, was £5.8 billion in December 2025. Cumulatively for the financial year to December 2025, this deficit totals £94.9 billion, showing a reduction of £1.6 billion or 1.6% compared to the same nine-month period in 2024.
Expert Perspectives on the Borrowing Figures
Financial experts have offered nuanced interpretations of the latest borrowing statistics, acknowledging the improvement while highlighting underlying concerns.
Philly Ponniah, Chartered Wealth Manager and Financial Coach at Philly Financial, commented: "This looks better on the surface, but it is hardly a turning point. Borrowing is lower than last December, which helps the optics, but the UK is still running one of the biggest peacetime deficits on record, with day to day spending largely funded by debt."
Ponniah continued: "The real risk of carrying this much debt is that it limits choices. More tax rises, tighter public spending, and less room to respond when the next shock hits. Interest costs also eat into budgets that could go to public services or growth."
He advocated for a strategic shift: "If I were doing it differently, the focus would be less on short term fixes and more on growth that actually sticks, backing productivity, skills and long term investment while being more honest about what the state can afford today rather than pushing the bill further into the future."
Structural Economic Concerns Raised
Rohit Parmar-Mistry, Founder of Burton-on-Trent-based Pattrn Data, offered a more critical perspective on the underlying economic model: "We've spent years hammering consumption with austerity, yet borrowing remains high because we never truly recovered from the last recession. You cannot cut your way to growth when ordinary people have no disposable income left to spend."
Parmar-Mistry identified what he sees as a fundamental problem: "The problem isn't government spending itself, it's that we're funding private extraction, not public growth. Spending should generate tax revenue by circulating in the real economy. Instead, it's siphoned off by private companies in the NHS and utilities who take the cash but don't reinvest it. It's a broken model."
He proposed radical solutions: "We need a hard pivot. Nationalise energy, water, and transport so revenue stays in the system. Stop outsourcing NHS contracts to the private sector. We need infrastructure that delivers value to the taxpayer, not guaranteed profits for shareholders. It's time to stop treating the UK economy like a cash cow for the private sector."
Long-Term Implications and Future Outlook
The latest borrowing figures present a complex economic narrative for the UK. While the reduction from December 2024 demonstrates some fiscal improvement, the persistently high borrowing levels relative to historical data suggest ongoing challenges. The divergence between short-term improvements and long-term structural concerns highlighted by experts indicates that the debate around public sector borrowing extends beyond mere numbers to fundamental questions about economic strategy and public service delivery.
As the government continues to navigate these fiscal waters, the balance between immediate borrowing reductions and sustainable long-term economic growth remains a central policy challenge that will likely influence future budgetary decisions and economic planning.
