United Kingdom national debt
The United Kingdom national debt is the outstanding stock of liabilities owed by the public sector of the United Kingdom. In official statistics it is most commonly reported as public sector net debt excluding public sector banks, which is often referred to as "the national debt".
At the end of November 2025, PSND ex was provisionally estimated at £2,927.7 billion, equivalent to 95.6% of gross domestic product.
Debt is primarily financed through the issuance of gilt-edged securities and Treasury bills by HM Treasury via the Debt Management Office, alongside retail savings products issued by National Savings and Investments.
National debt is a stock measure and differs from the government's deficit or surplus, which measures borrowing over a period. Other definitions are used in some contexts, including general government gross debt for international comparisons under the European System of Accounts.
Approximately 8% of the UK national debt is owned by the British government due to the Bank of England's quantitative easing programme, so approximately 8% of the cost of servicing the debt is paid by the government to itself.
In 2017, due to the Government's budget deficit, the national debt increased by £46 billion. The Cameron–Clegg coalition government in 2010 planned that they would eliminate the deficit by the 2015/16 financial year. However, by 2014 they admitted that the structural deficit would not be eliminated until the financial year 2017/18. This forecast was pushed back to 2018/19 in March 2015, and to 2019/20 in July 2015, before the target of a return to surplus at any particular time was finally abandoned by the then Chancellor of the Exchequer George Osborne in July 2016.
Definition
The UK national debt is the total quantity of money borrowed by the Government of the United Kingdom at any time through the issue of securities by the British Treasury and other government agencies.Public sector debt and borrowing statistics for the United Kingdom are published in the Public sector finances statistical bulletin, produced jointly by the Office for National Statistics and HM Treasury. These statistics are compiled using national accounts concepts under the European System of Accounts and the System of National Accounts.
The ONS publishes several related balance-sheet measures. The best-known is public sector net debt excluding public sector banks, which is often used as a proxy for "the national debt". PSND ex is defined as the public sector's accumulated liabilities in loans, debt securities, deposits and currency, minus liquid financial assets such as foreign exchange reserves and cash deposits, with both recorded at nominal value.
Public sector net financial liabilities excluding public sector banks includes all financial assets and liabilities recognised in the national accounts, rather than only liquid assets and the main debt instruments, and is therefore broader than PSND ex. The ONS publishes variants that remove the Bank of England's balance sheet from the PSND aggregate.
For international comparisons, the ONS publishes general government gross debt. This is a consolidated gross measure for the general government sector, recorded at nominal value, covering currency and deposits, debt securities and loans.
In ONS publications, "ex" measures are the most frequently used balance-sheet aggregates. They exclude public sector banks for those periods from 2008 to 2024 when certain monetary financial institutions were classified within the public sector.
Debt-to-GDP ratios
Public sector net debt is commonly expressed as a percentage of GDP to aid comparisons over time and between countries. In the monthly public sector finances release, the GDP denominator used for ratios is based on a 12-month total centred on the month being reported and can include forecast data. As a result, debt-to-GDP ratios may be revised as GDP estimates and forecasts are updated.Debt versus deficit
In the United Kingdom's official statistics, the term "deficit" is most commonly used to describe public sector net borrowing excluding public sector banks. Net borrowing is an accrued measure of the gap between total public sector spending and total receipts over a period, while net debt is a balance sheet measure at a point in time.The UK national debt is often confused with the government budget deficit. For example, the then Prime Minister David Cameron was reprimanded in February 2013 by the UK Statistics Authority for creating confusion between the two, by stating in a political broadcast that his administration was "paying down Britain's debts". In fact, his administration had been attempting to reduce the deficit, not the overall debt; which continued to rise even as the deficit was reduced.
Net borrowing
Public sector net borrowing is equal to the public sector current budget deficit plus net investment. The current budget deficit reflects day-to-day spending and receipts, while net investment covers capital expenditure and capital transfers net of depreciation and capital receipts, within the national accounts framework used for the public sector finances statistics.Cash requirement and financing
The public sector net cash requirement is a cash-based measure of how much cash needs to be raised over a period to meet the public sector's obligations. It can be close to net borrowing, but it differs because some transactions affect cash needs without affecting the deficit, and because of timing differences between when spending and receipts are recorded on an accruals basis and when cash is paid or received.The central government net cash requirement is a closely watched component because it is a useful indicator of the amount of gilts and Treasury bills that the government needs to issue.
From borrowing to changes in debt
Changes in public sector net debt between two dates are related to, but not the same as, net borrowing over the intervening period. Differences can arise for several reasons, including:- financial transactions that affect debt but are not counted in net borrowing, such as loans and other acquisitions of financial assets
- timing differences between accruals measures and cash measures
- classification changes within the public sector boundary and other methodological updates to public finance statistics
- the treatment of certain central bank operations, including how the Bank of England's Asset Purchase Facility consolidates within the public sector balance sheet in official presentations of some aggregates
UK budget
The public debt increases or decreases as a result of the annual budget deficit or surplus. The British government budget deficit or surplus is the cash difference between government receipts and spending. The British government debt is rising due to a gap between revenue and expenditure. Total government revenue in the fiscal year 2015/16 was projected to be £673 billion, whereas total expenditure was estimated at £742 billion. Therefore, the total deficit was £69 billion. This represented a rate of borrowing of a little over £1.3 billion per week.Gilts
The British government finances its debt by issuing gilts, or Government securities. These securities are the simplest form of government bond and make up the largest share of British government debt. A conventional gilt is a bond issued by the British government that pays the holder a fixed cash payment every six months until maturity, at which point the holder receives the final coupon payment and the return of the principal.Cost of servicing the debt
Debt interest is the cost of servicing outstanding public sector liabilities, reported in official statistics as part of public sector current expenditure.For central government, debt interest costs depend on the size and composition of the debt stock and on market conditions. Conventional gilts pay fixed cash coupons, while index-linked gilts adjust both coupons and principal in line with the Retail Prices Index with a lag, which can increase the accrued cost of servicing debt when RPI inflation is high.
Debt interest measures can be affected by the interaction between central government debt and the Bank of England's holdings of gilts. The Bank is part of the public sector, so interest paid on gilts held by the Bank does not leave the public sector on a consolidated basis. The Office for Budget Responsibility describes the net effect on public sector debt interest as depending on the difference between coupon income on gilts held by the Bank and the interest paid on the reserves created to finance those purchases.
The OBR reports that debt interest as a share of GDP fell in the decade before 2019–20, reflecting historically low interest rates, low RPI inflation, and the expansion of gilt holdings by the Bank. Debt interest rose sharply in 2022–23 as inflation increased and interest rates rose.
Credit rating
Like other sovereign debt, the United Kingdom's central government debt is rated by credit rating agencies.| Agency | Rating | Outlook | Most recent publicly reported action |
| S&P Global Ratings | AA | Stable | Rating described as AA with a stable outlook |
| Fitch Ratings | AA- | Stable | Reaffirmed AA- rating with a stable outlook |
| Moody's | Aa3 | Stable | Affirmed Aa3 rating with a stable outlook |
On 23 February 2013, it was reported that Moody's had downgraded UK debt from Aaa to Aa1, the first time since 1978 that the country has not had an AAA credit rating.
This was described as a "humiliating blow" by Shadow Chancellor Ed Balls. George Osborne, the Chancellor, said that it was "a stark reminder of the debt problems facing our country", adding that "we will go on delivering the plan that has cut the deficit by a quarter". France and the United States of America had each lost their AAA credit status in 2012.
The agency Fitch also downgraded its credit rating for British government debt from AAA to AA+ in April 2013.
Further downgrades were made by Fitch and Standard & Poor's in June 2016, following the UK's vote in the referendum of that month to leave the European Union.
In March 2020, Fitch downgraded the United Kingdom's long-term issuer rating from AA to AA- and assigned a negative outlook, citing the deterioration of the public finances linked to the COVID-19 shock and fiscal policy decisions.
Moody's lowered the United Kingdom's rating from Aa2 to Aa3 in October 2020 and revised its outlook to stable from negative.
In October 2022, Moody's changed the outlook on the United Kingdom to negative while maintaining its Aa3 rating, citing political and policy uncertainty.
Fitch revised the outlook on the United Kingdom to stable from negative in March 2024, while affirming its AA- rating.