UK Public Sector Net Borrowing Ex Banks: November 2025 Analysis
Table of Contents
The UK’s Public Sector Net Borrowing Ex Banks (PSNB ex) for November 2025 stood at -£17.43 billion, a notable improvement from October’s -£19.89 billion but still above the consensus forecast of -£15.20 billion. This figure indicates the government’s net fiscal position excluding bank interventions, reflecting ongoing efforts to manage public finances amid a complex economic backdrop.
Drivers this month
- Improved tax receipts from corporate and income taxes contributed to a £2.50 billion reduction in borrowing.
- Lower-than-expected welfare payments helped ease fiscal strain by approximately £1.20 billion.
- Capital spending remained elevated, limiting further borrowing reduction.
Policy pulse
The borrowing level remains above the 12-month average of -£14.87 billion, signaling persistent fiscal deficits despite government austerity measures. The Bank of England’s ongoing rate hikes to combat inflation continue to pressure debt servicing costs, complicating fiscal consolidation.
Market lens
Immediate reaction: GBP/USD appreciated 0.30% within the first hour post-release, reflecting market relief at the borrowing improvement but tempered by the miss versus expectations. UK gilts saw a modest yield decline of 5 basis points, indicating cautious optimism.
Core macroeconomic indicators provide essential context for the borrowing data. UK GDP growth slowed to 0.20% QoQ in Q3 2025, down from 0.40% in Q2, reflecting subdued consumer spending and investment. Inflation remains sticky at 5.10% YoY, well above the Bank of England’s 2% target, pressuring real incomes and government welfare outlays.
Monetary policy & financial conditions
The Bank of England has raised its policy rate to 5.25%, the highest level in over a decade, aiming to tame inflation. This tightening has increased government borrowing costs, with 10-year gilt yields rising from 3.10% in August to 3.60% in November. Credit conditions have tightened, slowing private sector credit growth to 3.40% YoY.
Fiscal policy & government budget
Fiscal policy remains cautiously contractionary. The government’s Autumn Statement outlined plans to reduce the structural deficit by 0.50 percentage points of GDP in 2026, focusing on spending restraint and targeted tax increases. However, elevated capital expenditure commitments and social spending pressures limit rapid deficit reduction.
External shocks & geopolitical risks
Heightened geopolitical tensions in Eastern Europe and supply chain disruptions continue to weigh on the UK economy. Energy price volatility, driven by sanctions and conflict risks, adds inflationary pressure, complicating fiscal and monetary policy coordination.
Monthly borrowing trends show a pattern of fiscal tightening interrupted by episodic spending surges, often linked to capital projects or welfare adjustments. The October spike was partly due to delayed tax receipts and increased social spending, which reversed somewhat in November.
This chart highlights a tentative reversal of the two-month borrowing surge, trending downward but still elevated. The data signals ongoing fiscal challenges amid macroeconomic headwinds, with borrowing unlikely to normalize fully until mid-2026.
Market lens
Immediate reaction: GBP/USD rose 0.30%, UK 10-year gilt yields fell 5 basis points, and FTSE 100 futures edged up 0.20% following the release. The market interpreted the borrowing improvement as a positive sign but remains cautious due to the miss versus expectations.
Looking ahead, the UK’s public sector borrowing trajectory faces several key risks and opportunities. The government aims to reduce borrowing to below £10 billion monthly by Q4 2026, contingent on stable growth and inflation easing.
Bullish scenario (20% probability)
- Inflation falls rapidly to below 3% by mid-2026, easing monetary policy and reducing debt servicing costs.
- Stronger-than-expected GDP growth (above 1.50% annualized) boosts tax revenues and lowers welfare spending.
- Geopolitical tensions ease, stabilizing energy prices and external trade.
Base scenario (60% probability)
- Inflation gradually declines to 4% by year-end 2026, with monetary policy remaining restrictive.
- GDP growth remains modest at 0.80% annualized, supporting slow fiscal consolidation.
- Geopolitical risks persist but do not escalate materially.
Bearish scenario (20% probability)
- Inflation remains sticky above 5%, forcing further rate hikes and increasing borrowing costs.
- GDP growth stalls or contracts, reducing tax receipts and increasing welfare needs.
- Geopolitical shocks disrupt trade and energy markets, worsening fiscal pressures.
Policy pulse
Monetary and fiscal policies must remain coordinated to navigate these scenarios. The Bank of England’s next moves will be critical in shaping borrowing costs, while government spending discipline will determine deficit trajectories.
The November 2025 UK Public Sector Net Borrowing Ex Banks data reveals a cautious improvement in fiscal health but underscores persistent challenges. Elevated borrowing levels reflect ongoing inflationary pressures, monetary tightening, and external uncertainties. Structural trends suggest a slow normalization path, but risks remain skewed to the downside.
Investors and policymakers should monitor inflation dynamics, geopolitical developments, and fiscal policy adjustments closely. The interplay of these factors will shape the UK’s borrowing costs, debt sustainability, and broader economic outlook through 2026.
Key Markets Likely to React to Public Sector Net Borrowing Ex Banks
Public sector borrowing data is a critical gauge of fiscal health and influences multiple asset classes. Markets sensitive to UK fiscal dynamics include government bonds, the British pound, equity indices, and related sectors. Below are five tradable symbols historically correlated with UK borrowing trends, reflecting their sensitivity to fiscal and macroeconomic shifts.
- FTSE100 – UK’s primary equity index, sensitive to economic growth and fiscal policy.
- GBPUSD – British pound vs. US dollar, reacts to fiscal and monetary policy shifts.
- EURGBP – Euro vs. British pound, reflects relative economic and fiscal conditions.
- GLEN.L – Glencore PLC, a major UK-listed commodity firm, sensitive to global economic conditions.
- BTCUSD – Bitcoin vs. US dollar, often viewed as a risk sentiment barometer during fiscal uncertainty.
Insight: UK Public Sector Net Borrowing vs. GBPUSD Since 2020
Since 2020, UK public sector net borrowing ex banks has shown a strong inverse correlation with GBPUSD exchange rates. Periods of rising borrowing, such as during the COVID-19 pandemic, coincided with GBP weakness due to fiscal concerns and monetary easing. Conversely, fiscal consolidation phases have supported GBP appreciation. This relationship underscores the importance of borrowing data as a leading indicator for currency markets.
| Year | Average Monthly Borrowing (£B) | GBPUSD Average |
|---|---|---|
| 2020 | -45.20 | 1.28 |
| 2021 | -30.40 | 1.35 |
| 2022 | -20.10 | 1.31 |
| 2023 | -15.30 | 1.25 |
| 2024 | -14.90 | 1.27 |
| 2025 (YTD) | -16.10 | 1.29 |
FAQs
- What is UK Public Sector Net Borrowing Ex Banks?
- UK Public Sector Net Borrowing Ex Banks measures the government's net borrowing excluding bank interventions, reflecting fiscal balance.
- How does borrowing affect the UK economy?
- Higher borrowing can increase debt servicing costs and pressure inflation, while lower borrowing supports fiscal sustainability and economic stability.
- Why is the November 2025 borrowing figure important?
- The November 2025 figure signals fiscal trends amid inflation and monetary tightening, guiding policy and market expectations.
Takeaway: November’s borrowing improvement is a positive sign but fiscal risks remain elevated. Coordinated policy action is essential to ensure sustainable public finances and economic stability in 2026.









The November 2025 PSNB ex reading of -£17.43 billion marks a 13.70% improvement from October’s -£19.89 billion but remains 17.30% worse than the 12-month average of -£14.87 billion. This suggests a partial fiscal easing after a sharp spike in borrowing in October, which was the highest monthly deficit since May 2025 (-£20.16 billion).
Comparing year-on-year, November 2025 borrowing is 2.20% lower than November 2024’s -£17.81 billion, indicating a slow but steady fiscal consolidation trend. However, volatility remains high, with monthly swings averaging ±£3 billion over the past six months.