Original Source
UK February Budget Deficit Far Exceeds Forecast Amid Iran War
February Budget Deficit Significantly Higher
According to data released by the Office for National Statistics (ONS) on March 20, the UK's budget deficit in February 2026 reached £14.3 billion (approximately $19.17 billion). This figure substantially surpassed the £8.5 billion median forecast by economists polled by Reuters. The deficit increased by 18% compared to the same month last year, with the ONS attributing the rise primarily to the timing of interest payments. Interest payments in February surged to £13 billion, up from £7.5 billion in the previous year.
Iran War Fuels Borrowing Cost Pressures
The ongoing Iran War and the resulting surge in energy prices are causing a rapid increase in the UK government's borrowing costs. Pressure is also mounting on Chancellor of the Exchequer Jeremy Hunt to provide support to consumers facing rising utility and fuel costs. Elliott Jordan-Dock, senior UK economist at Pantheon Macroeconomics, stated that unless the Iran War quickly ends and energy prices stabilize, the government will face difficult decisions again in the autumn budget. Meanwhile, cumulative borrowing for the current fiscal year stood at £125.9 billion as of the end of February, roughly 12% lower than the same period last year.
*Source: Reuters (2026-03-20)*
