Key events
UK borrowed £20.2bn in September
In September alone, UK borrowing rose to £20.2bn, as the public sector spent more than it received in taxes and other income last month.
That’s £1.6bn more than in September 2024 and the highest September borrowing since 2020.
Nearly half of that deficit was due to the cost of servicing the existing national debt.
The ONS explains:
central government debt interest payable increased by £3.8bn to £9.7bn, with movements in the Retail Prices Index (RPI) adding volatility to the monthly debt interest costs.
Today’s public finances also show:
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central government departmental spending on goods and services increased by £2.6bn to £38.3bn, as pay rises and inflation increased running costs
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net social benefits paid by central government increased by £2.0bn to £27.5bn, largely caused by inflation-linked increases in many benefits and earnings-linked increases to State Pension payments
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payments to support the day-to-day running of local government decreased by £1.1bn to £10.0bn; these intra-government transfers are both central government spending and a local government receipt, so they have no effect on overall public sector borrowing
UK brrowing this financial year is highest since 2020
Newsflash: UK government borrowing is running at its highest level since the Covid-19 pandemic in the first half of this tax year, eating into chancellor Rachel Reeves’s headroom.
The Office for National Statistics has reported that the government has borrowed £99.8bn so far this finanical year – which is £11.5bn more than in April-September 2024.
That’s the second-highest April to September borrowing since monthly records began in 1993, after that of 2020.
The problem for Reeves is that this is £7.2bn more than the £92.6bn forecast by the Office for Budget Responsibility back in March. That shortfall creates pressure on the chancellor to raise taxes or cut spending to keep within her fiscal rules (to have debt falling in five years time).
Martin Beck, chief economist at WPI Strategy, says there is little relief for the Chancellor as borrowing remains stubbornly high. adding:
“As things stand, total borrowing in 2025–26 could overshoot the OBR’s full-year forecast by around £10bn, pushing the deficit to close to 5% of GDP.
That’s uncomfortably large for an economy operating near full employment and long past the shocks of the pandemic and energy crisis.
Still, the public sector’s sizeable deficit is partly a mirror image of the large financial surplus being run by households, and therefore not wholly within the government’s control.
AWS outage offers some a brief glimpse of a tech-free existence
Eva Corlett
Workers were sent home, exams were delayed, coffee machines had to be turned on manually and language app users feared their hard-won progress was lost as a result of the global outage of Amazon Web Services on Monday, as some made light of their briefly tech-free existence.
A glitch in the AWS cloud computing service brought down apps and websites for millions of users around the world affecting more than 2,000 companies, including Snapchat, Roblox, Signal and language app Duolingo as well as a host of Amazon-owned operations.
But amid the chaos affecting vital services around the world, some more unexpected consequences arose.
Amazon workers posted videos of themselves on TikTok relishing a slower work day, with some dancing in quiet warehouses, while others told CNN they had been sent home.
James from Texas told the network:
“Working for Amazon Flex we’ve been sent home due to their systems not being able to check us in or release us with pay. Because of this outage there’s no telling if the 80 of us here are going to be paid.”
Amazon says AWS cloud service is back to normal
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The worst disruption to hit the internet in over a year appears to be over.
Amazon has declared that its cloud service has returned to normal operations, ending an outage that brought down thousands of sites annd many popular apps, including Snapchat, Duolingo, Fortnite and Reddit.
At around midnight UK time, Amazon Web Services declared that its services were fully recovered, after its operations in the North Virginia region were hit by increased error rates and latencies, with a knock-on impact on other regions.
Amazon did caution that some services still had a backlog of messages that they will finish processing, and promised to share a “detailed AWS post-event summary.”
The outage – the largest since CrowdStrike’s glitch in 2024 – has highlighted the vulnerability of the world’s interconnected technologies, and the perils of relying on relatively few massive tech companies.
Dr Corinne Cath-Speth, the head of digital at human rights organisation Article 19, said:
“We urgently need diversification in cloud computing. The infrastructure underpinning democratic discourse, independent journalism and secure communications cannot be dependent on a handful of companies.”
Cori Crider, the executive director of the Future of Technology Institute, a thinktank that supports a sovereign technology framework for Europe, said:
“The UK can’t keep leaving its critical infrastructure at the mercy of US tech giants. With Amazon Web Services down, we’ve seen the lights go out across the modern economy – from banking to communications.”
The agenda
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7am BST: UK public finances for September
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9.55am BST: Chancellor Rachel Reeves to speak at a regional investment summit in Birmingham
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11.30am BST: Bank of England’s Andrew Bailey and Sarah Breeden testify to Lords Financial Services Regulation Committee
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