United Kingdom
Borrows in its own currency, but relies on foreign investors to fund a persistent current account deficit, which makes gilts sensitive to doubts about the public finances.
How much it owes, and what it costs
Government debt in the UK is about 102% of GDP this year, on IMF estimates, 18 points higher than in 2019. The government is running a deficit of 3.8% of GDP: even before paying 2.6% of GDP in interest, it spends more than it collects. The IMF expects debt to fall to about 100% by 2031.
| Measure | 2019 | 2025 | 2026IMF estimate | 2031IMF forecast | 2007–26 |
|---|---|---|---|---|---|
| Government debt% of GDP, gross | 84.5% | 102.1% | 102.0% | 100.2% | |
| Budget balance% of GDP, minus = deficit | −2.4% | −5.3% | −3.8% | −1.4% | |
| Primary balancebudget before interest | −0.9% | −2.7% | −1.1% | +1.5% | |
| Interest cost% of GDP, net | 1.4% | 2.6% | 2.6% | 2.9% |
Long-term foreign-currency ratings, checked 25 October 2026. AAA is the highest grade; below BBB− is “high yield”.
What it earns and spends abroad
The UK runs a current account deficit of 3.3% of GDP (about $142bn): it spends more abroad than it earns, and relies on foreign investors to fund the gap.
| Measure | 2019 | 2025 | 2026IMF estimate | 2007–26 |
|---|---|---|---|---|
| Current account% of GDP | −2.3% | −3.0% | −3.3% | |
| Current accountUS$ billions | −68 | −121 | −142 |
Growth, prices and borrowing costs
The IMF expects the economy to grow 1.3% this year in real terms, with inflation averaging 3.3%. Its 10-year borrowing cost, 5.40%, is above the economy’s nominal growth of roughly 4.6% (growth plus inflation). Over time, that makes debt harder to keep stable relative to GDP.
22 Oct 2026
Oct 2026
Sep 2026
| Measure | 2025 | 2026IMF estimate | 2027IMF forecast |
|---|---|---|---|
| Growthreal GDP, % | 1.2% | 1.3% | 1.2% |
| Inflationaverage for the year, % | 3.4% | 3.3% | 2.8% |
| Unemployment% of workforce | 4.9% | 5.3% | 5.3% |
United Kingdom in the news
Newest first.
- 24 Oct 2026Investors rush into government bonds after an AI-led tech sell-offThe US 10-year yield had its biggest one-day fall in over two years on 22 October. German, French and UK yields also dropped.United States · Europe · Euro area · United Kingdom · Link 4 · Yields · In the chain
- 24 Oct 2026UK inflation jumps to 3.5%, and the rise is spreadingUp from 3.1% in August and above forecasts. Core inflation also rose, a sign the pressure is spreading beyond fuel.Europe · United Kingdom · Link 1 · Inflation · Cause
- 24 Oct 2026Markets expect the Bank of England to raise rates on 5 NovemberInvestors expect a 25 bp rise to 4.00%. Three of nine policymakers already voted for one in September.Europe · United Kingdom · Link 3 · Expected rates · In the chain
- 24 Oct 2026UK borrowing overshoots ahead of the 28 October BudgetBorrowing from April to September was £97.8bn, £6bn above forecast. The 10-year gilt sits near 5.4%.Europe · United Kingdom · Government finances → Link 4 · Cause
- 24 Oct 2026UK fixed mortgage rates climb towards 6%The average two-year fix rose to 5.97% from 5.68% a month earlier, though Bank Rate hasn’t moved since December.Europe · United Kingdom · Link 5 · Real economy · Effect
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Sources and notes
- Government finances, current account, growth, inflation and unemployment: IMF World Economic Outlook and Fiscal Monitor, via the IMF DataMapper (checked 2026-10-24). The IMF publishes them in April and October.
- 2026 figures are IMF estimates, and later years are IMF forecasts. Earlier years are actual data, sometimes revised.
- Debt is general government gross debt: central, regional and local government and social security. Interest cost is net interest, worked out as the primary balance minus the overall balance.
- Credit ratings: long-term foreign-currency ratings from S&P Global, Moody’s and Fitch, checked on the date shown. Agencies can change them at any time.
- Policy rates, 10-year yields, monthly inflation and exchange rates: as on The numbers page.