London, November 23, 2025
Government borrowing in both the United Kingdom and the United States exceeded expectations in October 2025, reflecting mounting fiscal pressures as public spending outpaces revenues amid uncertain economic conditions.
United States Debt Reaches Record High
In October 2025, U.S. government debt climbed to approximately $38.04 trillion, up from $37.64 trillion the previous month. This increase pushed the debt-to-GDP ratio to 124.3%, a slight rise from 122.3% in September. The fiscal year 2025 deficit is projected at about $1.8 trillion, signaling persistent structural budgetary imbalances.
This surge stems largely from government expenditures exceeding revenue streams. Despite a brief surplus in September driven by changes to federal student loan programs, the overall borrowing has continued on an upward trajectory. Domestic entities hold the majority of this debt, although foreign ownership has incrementally increased over recent decades.
UK Government Borrowing Exceeds Forecast
Across the Atlantic, UK government borrowing in October stood at £17.43 billion, surpassing economists’ forecast of £15 billion and marking the third-highest October figure on record. While this represents a slight decline from £19.2 billion in October 2024, the elevated borrowing level underscores ongoing fiscal strain.
The higher borrowing is attributed to increased spending on benefits and public services combined with slower consumer spending. Household delays in purchases ahead of key sales periods such as Black Friday contributed to weaker-than-expected tax receipts.
Drivers Behind the Fiscal Imbalance
Both countries face similar fiscal dynamics, with broad public expenditures on social programs, benefits, and services outpacing available revenues. In the U.S., recent student loan program reforms have temporarily affected borrowing patterns, while in the UK, consumer behavior and elevated spending pressure borrowing needs.
These developments occur amid efforts to manage the trade-offs between maintaining essential governmental functions and addressing rising public debt levels. Elevated borrowing costs and growing debt-to-GDP ratios may limit future fiscal flexibility and increase interest obligations.
Policy Outlook and Budgetary Challenges Ahead
The October borrowing figures arrive just days before the UK’s Chancellor Rachel Reeves is set to announce the national budget, where analysts anticipate measures including further tax increases and spending cuts to reduce the fiscal deficit.
Similarly, U.S. policymakers continue to navigate structural deficits against a backdrop of economic uncertainties, with the need to balance fiscal responsibility and growth-supporting policies. The challenges underscore the importance of credible, effective budget strategies in both nations to ensure sustainable public finances.
Continued monitoring of government borrowing levels will be crucial as both administrations engage in complex fiscal policymaking to stabilize debt trajectories while supporting economic recovery.