Key facts
- Britain's government deficit in May was £23.3 billion, up 30% year-on-year.
- The May deficit exceeded the median forecast of £18.5 billion from economists polled by Reuters.
- Public sector net borrowing for May 2025 was £17.7 billion, the second highest on record for the month.
- The financial year-to-date deficit (April-May 2025) was £37.7 billion.
- Public sector net debt was provisionally estimated at 96.4% of GDP at the end of May 2025.
Britain's government recorded a budget deficit of £23.3 billion in May, significantly exceeding economists' expectations and marking a 30% increase from the previous year, according to the Office for National Statistics. The figure was higher than the £18.5 billion median forecast in a Reuters poll.
Public sector net borrowing in May 2025 was £17.7 billion, the second highest for the month since records began in 1993, and £0.7 billion more than in May 2024. For the financial year to May 2025, borrowing stood at £37.7 billion, £1.6 billion higher than the same period in 2024, though below the Office for Budget Responsibility's March forecast of £40.7 billion.
The current budget deficit, which funds day-to-day activities, was £12.8 billion in May 2025, and £27.4 billion for the financial year to May 2025. Public sector net debt, excluding public sector banks, was provisionally estimated at 96.4% of GDP at the end of May 2025, a level not seen since the early 1960s.
Previously, the government's budget watchdog forecast a deficit of £115.5 billion for the 2026/27 financial year. However, the economic outlook has weakened, and borrowing costs have risen, with Britain recently offering the highest yield on 15-year debt since at least 1998. Defence minister John Healey resigned last week, citing struggles to finance increased defence spending within existing budget rules.