PwC comments on ONS Public Sector Finance data for February 2025

Commenting on the latest ONS public sector finance data, Nabil Taleb, economist at PwC UK, says:

“Public sector net borrowing came in at £10.7bn in February 2025, £0.1bn more than was recorded in February last year and the fourth highest February borrowing since records began. Financial year-to-date borrowing was around 13% higher than in the same period a year ago.

“Debt interest payments remain high, amounting to £7.4bn in February 2025, equal to February 2024, and continue to add to the fiscal headwinds facing the Chancellor. We anticipate the OBR will revise up its projections for government debt interest payments in its March forecast, presenting a further hurdle for Reeves in meeting Labour’s fiscal rules. While an uplift in growth expectations could provide some respite, it may not be enough to counter the numerous headwinds.

“Pressure is mounting as fiscal constraints tighten and difficult trade-offs loom. With little immediate relief seen so far, and uncertainty continuing, household incomes continue to be squeezed which could slow growth at a time when inflation and borrowing costs remain high. Public service reforms may improve efficiency, but any gains will take time to materialise. Meanwhile, increased defence spending has absorbed what little fiscal headroom remained. With each new pressure point narrowing the options available, sticking to the non-negotiable fiscal rules is becoming an ever-greater challenge.”