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Government debt in the United Kingdom reached over 2.9 trillion British pounds in 2025/26, compared with 2.8 trillion pounds in the previous financial year. Although debt has been increasing throughout this period, there is a noticeable jump between 2019/20 and 2020/21, when debt increased from 1.82 trillion pounds to 2.16 trillion. The UK's government debt was the equivalent of 93.2 percent of GDP in 2024/25 and is expected to increase slightly in the coming years and not start falling until the end of this decade.

Public finances in a tight spot

With government debt approaching 100 percent of GDP, the UK finds itself in a tricky fiscal situation. If the UK can't reduce its spending or increase its revenue, the government will have to continue borrowing large amounts, increasing the debt further. Adding to the problem is the fact that financing this debt has gotten steadily more expensive recently, with the government currently spending more on debt interest than it does on defence, transport, and public order and safety. 

Can the UK grow out its debt?

After the Second World War, when the national debt reached over 250 percent of GDP, the UK managed to reduce its debt-to-GDP ratio due to the economy growing faster than its debt over a long period of time. This is certainly the hope of the current Labour government, which is seeking to avoid considerable tax and spending adjustments by strengthening the economy. Overdue investments in infrastructure and increased capital spending may eventually achieve this goal, but the government's declining popularity suggests they may not be in power by the time these policies might eventually bear fruit.