Government borrowing falls by greater than a 3rd in December | EUROtoday

UK authorities borrowing was considerably decrease final month, attributable to a rise in tax revenue outweighing spending, official figures present.

In December authorities borrowing – the distinction between public spending and tax revenue – was £11.6bn, the Office for National Statistics (ONS) mentioned.

It is down £7.1bn – 38% – from the earlier December, and decrease than what many economists had predicted.

Tom Davies, Deputy Director for the ONS public service division, mentioned the autumn was a results of “receipts being up strongly on last year whereas spending is only modestly higher”.

Despite the annual fall, the December 2025 determine was the tenth highest for the month since information started in 1993, with out adjusting for inflation.

And it stays increased than December 2023, when borrowing stood at £8.1bn.

The figures present the federal government obtained £7.7bn extra – an 8.9% rise – in taxes in December 2025 than it did in the identical month in 2024.

This comprised will increase in revenue tax, company tax, VAT and National Insurance contributions (NIC), the ONS mentioned – with modifications to the speed of NIC paid by employers coming into impact in April final yr.

According to provisional estimates, borrowing over the monetary yr to December totalled £140.4bn, about £300m decrease than the identical interval in 2024, the ONS mentioned.

Chief Secretary to the Treasury, James Murray, mentioned the federal government was “stabilising the economy, reducing borrowing, rooting out waste in the public sector”.

He mentioned: “Last year we doubled our headroom and we are forecast to cut borrowing more than any other G7 country with borrowing set to be the lowest this year since before the pandemic.”

Ruth Gregory, deputy chief UK economist at Capital Economics, mentioned public funds have been “finally showing signs of improvement in recent months”.

“What’s more, a further improvement in January is on the way. Those figures will probably show a bumper set of self-assessment tax and capital gains tax (CGT) receipts reflecting the freeze on income tax thresholds and a disposal of assets due to the speculation that Reeves would raise CGT.”

But she mentioned the “big picture is that the pace of deficit reduction remains very slow”.