Steep tax increases in the upcoming Autumn Budget are predicted as a certainty, according to financial experts, following a surge in government borrowing.
The Office for National Statistics (ONS) has revealed that the UK's public sector net debt stands at £2.91 trillion, equating to 96.4% of gross domestic product (GDP). This represents an increase of 0.5 percentage points from a year ago.
The borrowing figures for the year to date have been described as 'ugly' by Elliott Jordan-Doak, a senior UK economist at Pantheon Macroeconomics. The borrowing for the first five months of the financial year totalled £83.8 billion, which is £16.2 billion higher than the same period last year.
The borrowing in August 2025 significantly overshot the expected £12.8 billion by most economists. Higher spending on benefits and public services contributed to this high borrowing. Debt interest in August 2025 was increased by £2.6 billion due to changes in the Retail Prices Index on inflation-linked debt.
James Murray, Chief Secretary to the Treasury, stated that the Government's focus is on economic stability, fiscal responsibility, reducing red tape, eliminating waste from public services, driving reforms, and increasing money in working people's pockets.
Elliott Jordan-Doak suggests that the Chancellor may need to raise taxes by more than £20 billion to address the growing deficit. Shadow chancellor Mel Stride criticises the Chancellor for losing control of the public finances and blames the party's 'weakness' for not implementing welfare reforms to cut spending.
Mel Stride warns of more tax rises in the autumn due to Labour's increasing borrowing. The Chancellor is under increasing pressure to consider tax hikes due to a potential black hole in the nation's finances and the risk of broken fiscal rules. Martin Beck, chief economist at WPI Strategy, stated that the £10 billion buffer against the fiscal rule in March has almost certainly been used up, implying tax rises in November are likely.
The Government's borrowing for August 2025 was £18 billion, marking the highest August borrowing in five years. Soaring interest on Government debt in August 2025 was £1.9 billion, bringing it to £8.4 billion. The borrowing in August 2025 was £5.5 billion higher than the forecast by the Office for Budget Responsibility (OBR) in March.
The ONS revised borrowing estimates for recent months up by almost £6 billion due to lower VAT receipts. No new information about borrowing in August 2025 was provided in this paragraph.
The current Chancellor of the United Kingdom is not explicitly named in the search results; however, the Prime Minister since July 5, 2024, is Keir Starmer, and Yvette Cooper has been serving as the Foreign Secretary since September 2025. The Chancellor role specifically is not identified in the provided information.
He expects the Chancellor to fill the fiscal hole with a combination of stealth and sin tax increases, along with some smaller spending cuts. The borrowing for the financial year to date is well ahead of the OBR's £72.4 billion prediction.
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