High public borrowing maintains pressure on a Chancellor boxed in by the market and her own decisions
Professor Joe Nellis December 19th 2025
Professor Joe Nellis is economic adviser at MHA, the accountancy and advisory firm.
UK public sector net borrowing totalled around £11.65 billion in November, underlining the continued pressure on the public finances as the economy approaches 2026. While the figure was broadly in line with expectations, and lower than previous months it reinforces the reality that fiscal conditions remain tight.
The continued large borrowing total justifies the Chancellor’s decision to create a larger fiscal headroom than planned, although the headroom remains historically small.
The November outturn reflects a persistent imbalance between revenues and spending. Economic activity remains subdued with little or no growth expected in Q4, limiting the pace of growth in tax receipts, while government expenditure continues to be supported by elevated debt interest payments and ongoing pressure on public services.
For the government, the figures offer little room for complacency. Borrowing at this level constrains future policy choices and leaves limited headroom for discretionary fiscal measures.
There are positive movements in the cost of servicing the debt — inflation has fallen to 3.2% and bond yields have stabilised in the final quarter of the year — but government debt repayments remain high.
Decisions on taxation, public spending and investment will need to remain tightly managed to avoid unsettling financial markets. Failure to do this will lead to even higher bond yields with knock-on consequences for corporate borrowing and mortgage costs.
"As the UK looks ahead to 2026, November’s borrowing figures serve as a clear reminder: fiscal policy remains constrained, and credible management of the public finances will be central to economic stability in the period ahead."
