Business · Economy · 5 hrs ago
Experts forecast £70bn in extra UK government borrowing
City experts expect the UK to borrow an extra £70bn over coming years, according to forecasts ahead of the Budget.
Chancellor John Healey is expected to use the money to cover rising debt interest and welfare costs.
The forecast comes as conflict in the Middle East has pushed up oil and gas prices, reducing the government's financial buffer.
Inflation reached 3.5 per cent last month, while government debt passed £3 trillion and monthly interest payments hit a record £10.9 billion.
Healey aims to meet the rule that national debt must fall as a share of the economy by the end of the decade.
He also plans to use flexibility in the rules to invest £20bn in the British Business Bank and National Wealth Fund, with extra borrowing for that investment starting several years from now.
Investors will be watching whether the Budget sets out a credible plan for later spending choices, including defence and welfare.
City experts forecast that the UK government may borrow an extra £70 billion over coming years to cover rising debt interest and welfare costs.
The forecast comes as the Chancellor prepares his first Budget, due on Wednesday.
The article says higher borrowing than the Office for Budget Responsibility projected could add £70 billion to public sector net debt by 2031–32.
The Middle East conflict has driven up oil and gas prices, while inflation and the government’s debt interest bill have also risen.
Chancellor John Healey is aiming to meet a fiscal rule requiring national debt to fall as a share of GDP by the end of the decade.
- Who
- City experts, including Deutsche Bank chief UK economist Sanjay Raja, forecast higher borrowing. Chancellor John Healey is preparing the Budget.
- What
- The government is forecast to borrow an additional £70 billion over coming years to cover debt interest and welfare costs.
- When
- The forecast was reported on 24 October 2026. The Budget was due on Wednesday.
- Where
- United Kingdom.
- Why
- Debt interest and welfare costs are rising, while the Middle East conflict has pushed up oil and gas prices.
This story does not have two clearly opposing sides.
The Office for Budget Responsibility had pencilled in lower borrowing, according to the article.
The Middle East conflict drove oil and gas prices higher, reducing the Chancellor’s fiscal headroom.
Inflation reached 3.5 per cent, an 11-month high.
City experts forecast that higher borrowing could add £70 billion to public sector net debt by 2031–32.
The Chancellor was due to present his maiden Budget.
- Forecast extra borrowing
- £70 billion
- Projected addition to public sector net debt
- £70 billion by 2031–32
- Inflation
- 3.5 per cent last month
- Monthly debt interest bill
- £10.9 billion, a record
- Fiscal headroom inherited
- £24 billion
What people are saying
The key question is not what the Chancellor does on Wednesday but whether he builds a credible bridge to the fiscal choices that follow