The Office for National Statistics has quietly revised the government’s borrowing figures. And the picture is, on the face of it, better than expected.
Borrowing in March 2026 came in at £12.6 billion — £1.4 billion lower than a year earlier, and the lowest March figure since 2022. More importantly, borrowing for the full financial year to March 2026 is now estimated at £132 billion. That’s nearly £20 billion lower than the previous year, below the Office for Budget Responsibility’s forecast.
In relative terms, borrowing has fallen to 4.3% of GDP — down from 5.2% the year before, and the lowest level since the pandemic.
Strip out investment spending, and the improvement looks even more striking. The current budget deficit — the amount the government borrows just to keep day-to-day services running — has fallen by a third since 2024, to £50.9 billion. As a share of the economy, that’s now 1.7% of GDP, again the lowest since 2020.
By any measure, this is great news. Advanced economies are on the precipice of a Government debt crisis, led by the US. The UK are quietly fixing the gaping holes in public finances. Fiscal prudence is back.
And yet you would struggle to find that reflected in the political debate.
For the past year, the dominant narrative has been one of fiscal crisis — a country with no room for manoeuvre, boxed in by its own finances. Some parts of the press have leaned heavily into that story, because it is simple, dramatic, and politically useful. A worsening crisis is easier to report, and easier to weaponise, than a slow improvement.
The problem is that the data is now moving in the opposite direction.
Borrowing is falling, and it is falling faster than expected. The government’s cash requirement — the amount it needs to raise from the markets — has dropped by £44.6 billion compared to the previous year. That is not a marginal revision. It is a big shift. It means that the UK’s reliance on international financial markets to fund Government spending is reducing fast.
But before anyone gets carried away, there are limits to how far this goes.
Debt remains high. Public sector net debt stands at 93.8% of GDP — still close to levels last seen in the early 1960s. A broader measure of liabilities is higher again, and rising.
And while borrowing is down, it is not low. A deficit of £132 billion is still substantial. The improvement is real, but it starts from a position of weakness. Public finances post Brexit and Covid were a mess.
There is also the question of durability. Some of the improvement reflects higher tax receipts and lower inflation-driven spending pressures. Neither can be taken for granted.
Even so, the scale of the change matters.
What we are seeing is not a fiscal position spiralling out of control, but one that is improving.
The more interesting question is why the politics has not caught up.
Part of it is inertia. Political arguments, once established, are slow to shift. Part of it is incentive. A narrative of permanent crisis suits those who want to argue that nothing can be afforded, or that only drastic measures will do. The Government isn’t in crisis. It is quietly and effectively passing lots of legislation that will transform the UK. Those who benefited from the pre-2024 status quo don’t like that, and have enough chums in the media and traction on line to undermine the Government.
And part of it is selective attention. When the numbers deteriorate, they dominate headlines. When they improve, they tend to be qualified, caveated, or quietly ignored.
None of this means the constraints disappear. High debt still limits flexibility. Public services remain under pressure. The scope for large, unfunded commitments is still constrained.
But it does mean the starting point is different to the one often presented.
If borrowing is falling faster than expected, then the debate about what can and cannot be done should at least acknowledge that reality.
At the moment, it doesn’t.
And that gap — between what the data shows and what the politics says — is becoming harder to ignore.