Commenting on the public sector finance release for July 2026 published by the Office for National Statistics today (Friday 21 August 2026), Henning Diederichs, ICAEW Director for Public Sector, said:
“Today’s numbers confirm that the public finances remain weak, with public sector net debt in July in touching distance of £3.0tn. Net debt is 64% higher than the £1.8tn amount owed to external investors in March 2020, at the start of the pandemic.
“Public sector net borrowing in July of £1.8bn was £0.7bn higher than the £1.1bn incurred in the same month last year, with debt interest and higher spending continuing to outweigh tax receipts. This is despite the tax burden being at its highest level in relation to the size of the economy since the 1960s, making it challenging for the Chancellor to both increase public spending significantly and stay within the government’s existing fiscal rules.
“However, one crumb of comfort is that the cumulative deficit for the first third of the financial year of £57bn was just £2bn overbudget, a slight improvement from June’s numbers. Keeping public spending under control will be key to maintaining the confidence of debt markets and hence minimising the risk of interest rates on government borrowing rising further.”
ENDS
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* includes parent companies. Source: ICAEW member data March 2026, Interbrand, Best Global Brands 2025.
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