New official data reveals that UK government borrowing, while falling to its lowest November level in four years, was significantly higher than economists had predicted, partly due to a costly reversal on winter fuel support.
Borrowing Dips But Misses Forecasts
Figures released on Friday 19 December 2025 showed that public sector net borrowing stood at £11.7 billion last month. This represents a substantial decrease of £1.9 billion compared to November of the previous year, marking the lowest borrowing figure for that month since 2021.
The primary driver behind this annual reduction was a sharp fall in debt interest payments, which dropped by £200 million to £3.4 billion, their lowest November level for six years. Increased receipts from taxes and National Insurance contributions also contributed to the improved monthly position.
The Impact of the Winter Fuel Policy Reversal
Despite the year-on-year improvement, the November borrowing figure was notably higher than the £10.3 billion forecast by most independent economists. It also far exceeded the £8.6 billion predicted in March by the government's fiscal watchdog, the Office for Budget Responsibility (OBR).
The discrepancy is largely attributed to the government's U-turn on its planned restriction of winter fuel payments. The initial proposal to implement strict means-testing was abandoned in favour of providing the payment to almost all pensioners, excluding only those with annual incomes above £35,000.
This policy reversal resulted in an extra £1.8 billion of expenditure. Consequently, borrowing for the first eight months of the current financial year (April to November) has reached £132.3 billion. This is £10 billion higher than the same period last year and a significant £16.8 billion above the OBR's spring forecast.
Revised Figures and Fiscal Outlook
The additional spending has also led to an upward revision of £3.9 billion to the borrowing total for the seven months leading up to October. Tom Davies, a senior statistician at the Office for National Statistics, noted the contrasting trends, stating: “Despite an increase in spending, this month’s borrowing was the lowest November for four years.”
The data presents a mixed picture for the Treasury. While lower debt costs are providing welcome relief to the public finances, unplanned policy costs are creating pressure and causing borrowing to overshoot independent forecasts. The figures will likely intensify scrutiny of the government's fiscal strategy in the months ahead.
