The British government will present its budget on October 28, marking the first such presentation by John Healey, who was appointed Chancellor of the Exchequer after Andy Burnham joined the government in July. The Office for National Statistics (ONS), the UK's official statistics agency, reported on September 22 that public borrowing in August was higher than expected. The public sector borrowed 18.3 billion pounds, a 19 percent increase compared to the 15.4 billion pounds borrowed in August 2025. This figure also surpassed the 14.8 billion pounds predicted by the Office for Budget Responsibility (OBR), an independent body that provides economic forecasts. According to the ONS, this is the second-highest borrowing level for an August month, following the record set in 2020. The ONS attributed the rise in borrowing to faster growth in public spending compared to tax and other revenue sources. This includes costs linked to inflation and increased spending on public pensions and social benefits. For the first five months of the current fiscal year, central government revenues rose by 3.8 percent, while current expenditures increased by 4.3 percent, with social benefits rising by 7.2 percent. In August, the public sector deficit, excluding investment, reached 12.4 billion pounds. The central government also paid 8.8 billion pounds in interest, a record for the month. The ONS noted that the retail price index, which measures inflation, added an additional 2.1 billion pounds to the borrowing figure, as some government debt is tied to inflation rates. Cumulative borrowing for the fiscal year, which began in April, reached 77.3 billion pounds by the end of August—2.2 billion pounds less than the same period in 2025. However, this still exceeds the OBR's projected borrowing by 8.1 billion pounds. The next ONS report, covering September, is expected on October 21, just a week before the budget announcement. The government's budgetary framework includes a key rule: it aims to balance its current budget by 2029-2030, when current revenues should cover current expenditures. In its forecast from March 3, the OBR predicted a current surplus of 23.6 billion pounds for that year, equivalent to 0.7 percent of the UK's gross domestic product (GDP). This slightly exceeds the 21.7 billion pounds forecast in November 2025. For the current fiscal year, the OBR estimated borrowing of 115.5 billion pounds, down from 132.7 billion pounds the previous year. The OBR warned that the projected surplus is very narrow, barely exceeding the average difference between two successive borrowing forecasts based on its last ten predictions. This projection was made before the escalation of the conflict in the Middle East, which has increased energy prices and kept borrowing costs high. The Bank of England has raised concerns about market conditions, with the median expectation for a 10-year interest rate reaching 5.00 percent by the end of 2026. John Healey has stated that his budget will be based on "fiscal discipline" and that he will follow the budgetary rules set by the Keir Starmer government in 2024. He has also confirmed that income tax, national insurance contributions, and value added tax (VAT) will not be increased. Budgetary compliance is only formally checked once a year, during the budget, starting with the 2026-2027 fiscal year. The October 28 budget will thus be the most important financial event of the year. Financial markets will closely watch how the chancellor balances different priorities, as previous budget announcements in September 2022 had caused significant tension in UK government borrowing, leading the Bank of England to temporarily step in to stabilize the market and reduce financial risks.