£2 Billion Boost for Chancellor Reeves Ahead of Autumn Budget After ONS Error
LONDON — Chancellor Rachel Reeves has received a rare dose of good news ahead of next month’s autumn budget, after the Office for National Statistics (ONS) admitted it had miscalculated government borrowing figures — revealing an unexpected £2 billion fiscal boost.
The ONS said borrowing for the financial year to August 2025 was £81.8 billion, not £83.8 billion as initially reported in September.
The revision means the Treasury effectively has £2 billion more fiscal headroom as Reeves prepares to present her first full budget since Labour took office.
According to the ONS, the error stemmed from incorrect VAT receipt figures supplied by HM Revenue and Customs (HMRC), which were used in its initial borrowing calculations.
“An omission by HMRC of some payment streams from the data used to estimate VAT receipts led to the miscalculation,” the ONS explained, adding that it was “difficult to independently verify” the revenue figures supplied by HMRC.
The correction also affects figures for the previous financial year, with borrowing for 2024–25 now estimated to be £1 billion lower than previously thought. Monthly borrowing estimates have been reduced by between £200 million and £500 million.
Borrowing Still Above Forecasts
Despite the welcome revision, total government borrowing remains well above the £72.4 billion forecast by the Office for Budget Responsibility (OBR) for the same period.
Economists say the additional fiscal space could give Reeves limited room to manoeuvre on spending or tax decisions as she finalises her autumn budget, but warned that high interest costs and sluggish growth continue to constrain the Treasury’s flexibility.
A Further Headache for the ONS
The admission marks yet another setback for the ONS, which has recently faced scrutiny over data reliability.
In recent months, the statistics agency has:
Overestimated inflation figures for April,
Delayed the release of monthly retail sales data in August due to reporting errors, and
Struggled to complete its revamped Labour Force Survey, leaving policymakers — including the Bank of England — with gaps in employment data.
While the ONS has pledged to strengthen its data verification systems, the repeated errors have fuelled concerns about the agency’s reliability at a time when accurate figures are crucial for fiscal and monetary policy decisions.
For Reeves, however, the revision — though modest — offers a rare moment of relief before what is expected to be a politically sensitive budget presentation next month.
