Government borrowing surges by a FIFTH to £18bn in August, piling pressure on Healey before the budget

From the Newshound archive · first published 22 September 2026.

Britain borrowed £18bn in August, a fifth more than in the same month last year and above forecasters' expectations, with rising inflation swelling government expenditure and eroding the pre-Budget headroom. The unexpectedly high figure leaves Chancellor John Healey with a tougher job steadying nervy bond markets before the budget.

Rising inflation is pushing government spending beyond projected levels, squeezing what little fiscal room Healey had left.

Higher borrowing costs risk unsettling bond markets that were already on edge before the budget.

The overshoot sharply narrows Healey's options — tax rises or spending cuts may now be unavoidable.