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Economic Buzz: UK budget deficit narrows in December
22-Jan-2026 15:52
The UK budget deficit narrowed more than expected in December driven by the increase in tax receipts, data from the Office for National Statistics showed on Thursday.

Public sector net borrowing decreased GBP 7.1 billion from the previous year to GBP 11.6 billion in December.

While borrowing was the lowest for December in two years, it still represented the tenth highest December borrowing since records began in 1993.

Current receipts increased 8.9 percent to GBP 94.0 billion, while current expenditure rose only 3.5 percent to GBP 92.9 billion. Tax receipts increased by GBP 4.6 billion to GBP 70 billion on higher income tax receipts.

Data showed that debt interest payable rose by GBP 0.2 billion to GBP 9.1 billion as payment increased due to higher inflation.

In the financial year to December, government borrowed GBP 140.4 billion, which was about GBP 300 million lower than in the same period of last year.

In the nine months to December, borrowing was estimated at 4.6 percent of GDP, which was 0.2 percentage points less than in the last year.

The Office for Budget Responsibility had projected borrowing to fall to GBP 138 billion in 2025-26, or 4.5 percent of GDP. It was estimated to reach GBP 67 billion or 1.9 percent of GDP in 2030-31.

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