PUBLIC sector borrowing by the government is less than a year ago but still stands at £11.6 billion as experts warned “the UK has a broken model”.
Borrowing – the difference between total public sector spending and income – was £11.6 billion in December 2025, Office for National Statistics data released today has revealed.
This was £7.1 billion or 38% less than December 2024 and the 10th highest December since monthly records began in 1993.
Borrowing in the financial year to December 2025 was £140.4 billion.
This was £0.3 billion or 0.2% less than in the same nine-month period of 2024, but still the third-highest April to December borrowing on record, after those of 2020 and 2024.
Borrowing in the financial year to December 2025 was provisionally estimated at 4.6% of gross domestic product (GDP).
This was 0.2% less than in the same nine-month period of 2024.
The current budget deficit – borrowing to fund day-to-day public sector activities – was £5.8 billion in December 2025.
This brings the total current budget deficit in the financial year to December 2025 to £94.9 billion, which is £1.6 billion or 1.6% less than in the same nine-month period of 2024.
Experts said that, while the figures are better than a year ago, it is not time to celebrate.
Broken model
Philly Ponniah, Chartered Wealth Manager and Financial Coach at Philly Financial, said: “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.
“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.
“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.”
You cannot cut your way to growth
Colette Mason, Author & AI Consultant at London-based Clever Clogs AI, said debt is becoming normal for the UK.
She added: “These figures will be spun as ‘progress’, but they mostly show the UK has learned how to borrow slightly more politely, not how to stop needing to borrow. High public debt quietly narrows future choices, locks governments into firefighting mode, and shifts the cost of today’s political comfort onto future generations who didn’t get a vote against the measure.
“The danger isn’t the headline number, it’s the normalisation: spiralling debt stops feeling like an emergency and starts feeling like putting a coat on to keep out the weather.”
Real risk
Rohit Parmar-Mistry, Founder at Burton-on-Trent-based Pattrn Data, said the UK has been doing it all wrong.
He continued: “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.
“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.
“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.”
