Mistakes in recent public finances data mean government borrowing has been overstated by a cumulative £3bn, the Office for National Statistics has announced.
In a fillip that gives Rachel Reeves a little bit more wriggle room in her November budget, the ONS said its estimates of public borrowing had been out by £200m-£500m a month since January.
While a welcome development for the chancellor, the revision is the latest sign of deep problems with the quality of economic data in the UK that have piled pressure on officials trying to get a clear picture to guide decision-making.
In a notice published on Wednesday, the ONS blamed a mistake in the VAT receipts data supplied by the tax authorities for the errors in its most recent tax and spending figures that were published on 19 September.
The mistake means cumulative public borrowing for the fiscal year ending March 2025 was £1bn lower than the ONS had previously suggested – and so far this year, April-August, it is £2bn lower.
A table published alongside the error notice showed that public borrowing was still running ahead of the March forecasts from the Office for Budget Responsibility (OBR) – but by less than previously estimated.
August’s borrowing figure of £18bn has been changed to £17.7bn, for example, which was £5.2bn ahead of the OBR’s estimates, instead of the £5.5bn first stated.
Full details will be incorporated in the next public finances data, due to be published on 21 October, the ONS said.
Reeves is still expected to announce tax rises in her budget next month to plug a spending gap estimated at between £20bn and £40bn, amid an expected productivity downgrade by the OBR and a series of policy reversals, including scrapping plans for welfare cuts.
HM Revenue and Customs acknowledged its mistake in a statement, saying it had “identified an error in our VAT cash receipts outturn which impacts provisional 2025 to 2026 year-to-date receipts”, adding: “VAT cash receipts from April 2025 to August 2025 have been increased by £2.4bn.”
While HMRC took responsibility for the error, it was the latest in a long line of revisions by the ONS, which has come under intense pressure over the reliability of its statistics since the Covid pandemic.
