October 9, 2025
The UK’s Office for National Statistics (ONS) slashes government borrowing estimates by £3 billion following the discovery of a VAT data error, easing fiscal pressure.
Britain’s Office for National Statistics (ONS) announced on 8 October 2025 that previous estimates for public borrowing would be revised downward by £3 billion after uncovering an error in the VAT receipts data supplied by HM Revenue & Customs (HMRC). Reuters+2The Guardian+2
The ONS stated that the correction reduces borrowing by £1 billion for the 2024/25 fiscal year and by £2 billion for the current year to date. Reuters+2The Guardian+2 Previously, borrowing for 2024/25 was estimated at just over £146 billion, and ~£84 billion had been reported for the first five months of the current fiscal year. After revision, the latter figure stands at £82 billion. Reuters+1
The error was traced to omitted VAT payment streams not included in the data provided by HMRC. The ONS acknowledged limitations in verifying external data inputs and pledged to work with HMRC, the Treasury, and the Office for Budget Responsibility (OBR) to strengthen data robustness. Reuters+2The Guardian+2
Though the revision is welcome, borrowing remains approximately £10 billion above the OBR’s forecasts for this fiscal year. Reuters+2Financial Times+2
In response to the corrected numbers, Finance Minister Rachel Reeves is expected to retain plans for tax increases in her November budget to help stabilize public finances and close fiscal gaps. Reuters+1
The episode has drawn attention to the data integrity challenges facing the ONS, especially in light of recent concerns about its handling of economic and labor market statistics. Financial Times+2The Guardian+2
As the ONS works to restore trust in its reporting, markets and policymakers will closely watch how these revisions alter the backdrop against which the upcoming UK budget is framed.
