7 Spring Forecast | 3 March 2026 Borrowing Government borrowing for the current year is now projected to be £132.7 billion, down £5.5 billion from the OBR’s November 2025 number, but £15 billion more than it projected a year ago. 2026/27’s borrowing is projected to be £115.5 billion, 3.1% higher than projected in November. Thereafter borrowing is below November’s projections. Gilts The uptick in borrowing contrasts with a £51.6 billion drop in projected gilt sales to £252.1 billion in 2026/27. Over half that decline stems from £27.5 billion less in gilt redemptions requiring refinancing in the next financial year. Net debt interest in 2026/27 is projected to be £109.4 billion, £3.9 billion below the November forecast, thanks to lower inflation and interest rates. Middle East conflict All these projections come with an obvious, elephantsized caveat. To quote the OBR from the EFO’s executive summary, “Conflict in the Middle East, which escalated as we were finalising this document, could have very significant impacts on the global and UK economies”. On Tuesday Brent crude oil was trading at close to $84 a barrel, over $20 above the OBR’s forecast for the 2026 average price. The gilts market also underlined that OBR caution on Tuesday 3 March, with the yield on the ten-year gilt rising to 4.57% from 4.39% at close on Monday. At the same time money markets movements suggested hopes that the Bank of England would cut bank rate later this month have largely faded. There are now about eight months until the Budget, by which time the next round of OBR figures could be more challenging than the spring’s set.
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