UK public debt crossed the £3 trillion mark for the first time at the end of September 2026, the National Statistics Office reported on Wednesday, October 21.
The accumulated public sector liabilities stood at £3.005 trillion, equivalent to €3.57 trillion, according to the provisional estimate released by the National Statistics Office. The figure represented 94 percent of UK gross domestic product and marked a historic high, the agency reported.
The balance grew by £91.7 billion compared with the level recorded twelve months earlier, about €109.074 billion, according to the provisional estimate.
Despite the nominal record, the weight of the liabilities on the economy as a whole fell by seven tenths compared with the 2025 level, the agency reported. The agency recalled that net debt exceeded £2 trillion in June 2020, during the COVID-19 pandemic, and had surpassed £1 trillion in February 2010, following the global financial crisis.
September public borrowing amounted to £24.5 billion, or €29.142 billion, and was the second highest recorded for that month, according to the National Statistics Office. Only the September 2020 figure, unadjusted for inflation, was higher. Compared with the previous year, the imbalance increased by £1.8 billion, or 7.7 percent, because spending growth outpaced income growth, the agency reported.
Britain’s national debt has climbed above £3tn for the first time, underlining the pressure on the public finances before John Healey’s maiden Budget next week
Central government debt interest reached £10.9 billion in September, the highest figure recorded in the ninth month of the year since monthly records began in 1997, according to the National Statistics Office.
Annual inflation stood at 3.5 percent in September, four tenths above the August figure and the largest increase since October 2025, according to the National Statistics Office. The price of goods rose 3.2 percent year on year, compared with 2.7 percent in August, while services became 3.7 percent more expensive. Core inflation, which excludes energy, food, alcohol and tobacco, advanced to 2.8 percent, two tenths more than in August.
The UK economy will grow 1.3% in 2026, according to the IMF. But will it really, asks David Craig. With unemployment rising, it's just an illusion of out-of-control borrowing. But try getting an economist to admit it.
French public-sector workers went on strike on Tuesday as demonstrations and school blockades spread across the country, two days before the government is due to present its 2027 budget.
Teachers, firefighters and health workers were among those taking part, with around 170 demonstrations planned nationally. High-school students also blockaded hundreds of schools, extending protests that began over teacher shortages, overcrowded classrooms and conditions in the education system.
The industrial action, accompanied by the traditional violence, places Prime Minister Sébastien Lecornu’s government under additional pressure before ministers present the draft finance and social-security budgets on Thursday, 1st October.
The French Education Ministry reported that 13.71 per cent of teachers participated in Tuesday’s strike across most of metropolitan France and Réunion. Participation reached 15.28 per cent among primary-school teachers and 12.74 per cent in secondary education.
Separate student action affected hundreds of secondary schools.
Protests were reported in Paris, Lille, Lyon, Nice and other cities. Some demonstrations involved clashes with police and damage outside schools, although much of Tuesday’s public-sector action proceeded without major disruption.
The dispute is centred partly on government spending plans.
Trade unions oppose a proposed freeze in the salary index used to calculate public-sector pay and argue that years of inflation have already reduced employees’ purchasing power. Firefighters have also demanded additional resources following the extensive wildfires that struck France during the summer.
The government is preparing its budget against a worsening fiscal background.
France’s public debt has climbed close to 120 per cent of gross domestic product, while the budget deficit remains well above the European Union’s 3 per cent ceiling.
EU Today reported earlier this month that French debt was heading towards 120 per cent of GDP, accompanied by an increase in the premium investors demand to hold French government bonds rather than German debt.
Higher interest rates are adding to the pressure. Debt-servicing costs have become one of the largest areas of central government spending, restricting the room available for tax reductions or additional expenditure.
The government has also reduced its 2026 economic growth forecast to 0.5 per cent.
Finance Minister Roland Lescure has acknowledged that France will miss its earlier deficit target, leaving the 2027 budget with the difficult task of demonstrating a credible path towards stabilising the public finances without provoking further political resistance.
The budget is due to be formally presented on Thursday. The Finance Ministry has confirmed that Lescure, Public Accounts Minister David Amiel, Labour Minister Jean-Pierre Farandou and Health Minister Stéphanie Rist will present the finance and social-security bills following the Council of Ministers.
The argument is taking place while EU fiscal surveillance is itself entering a more demanding phase.
Under the revised Stability and Growth Pact, member states are expected to follow agreed medium-term expenditure paths designed to bring deficits and debt onto sustainable trajectories.
EU Today recently examined how the EU’s fiscal rules face an enforcement test in October, when finance ministers and the European Commission return to national budget compliance. France is one of the countries where implementation will receive particularly close attention because of its debt level, persistent deficit and political difficulty in securing parliamentary agreement for spending reductions.
The domestic parliamentary arithmetic remains difficult. Lecornu’s government does not control an outright majority in the National Assembly, meaning the budget could become the subject of amendments, confidence votes or further negotiations with opposition parties.
The government has previously relied on Article 49.3 of the constitution to pass financial legislation without a conventional parliamentary vote, although use of the mechanism exposes a government to motions of no confidence.
Tuesday’s strikes add another layer to those negotiations. Trade unions have indicated that further action is possible if the budget contains measures they regard as unacceptable. The CGT has demanded changes to planned spending reductions and public-sector pay policy.
The precise scale of the government’s fiscal measures will become clearer on Thursday. For France, the budget will have to address three pressures simultaneously: deteriorating public finances, the EU’s fiscal framework and domestic opposition to further restraint.
The Ministry of Finance in Paris (Bercy). Jean-François Gornet / Flickr, CC BY-SA
France has crossed a critical threshold as its public debt exceeded €3.5 trillion in the first quarter of 2026, reaching 117.5% of GDP. The French Court of Auditors has sounded the alarm over what it describes as an “alarming” fiscal situation, as public deficits hit record levels and debt-interest costs continue to soar.
The Ministry of Finance in Paris (Bercy). Jean-François Gornet / Flickr, CC BY-SA
Public Debt Exceeds €3.5 Trillion
During the first quarter of 2026, France’s public debt passed the symbolic milestone of €3.5 trillion, reaching €3.5361 trillion at the end of March. The figure underscores the scale of the country’s budgetary challenges.
To put this amount into perspective, France would theoretically have to sell its entire gold reserve, all publicly traded and privately held state assets—including companies such as EDF, Engie, and Airbus—as well as all government-owned buildings and land in an attempt to repay the debt in a single payment. Even such a drastic measure would likely fall short.
In just one quarter, France’s Maastricht-defined public debt increased by €75.6 billion, a sharp rise in a very short period. This growing debt burden reflects a longstanding reality: for more than fifty years, the French government, local authorities, and social security system have collectively spent more each year than they have collected in revenue, particularly through taxation. To cover this structural gap, France has continued borrowing from financial markets.
Debt-to-GDP Ratio Nears Historic High
Beyond the headline figure, analysts and financial institutions are particularly concerned about debt relative to economic output. According to France’s National Institute of Statistics and Economic Studies (INSEE), public debt now equals 117.5% of gross domestic product.
The increase has been dramatic. In 1980, public debt represented only 20% of GDP. By 2000, it had risen to approximately 60%. Over four decades, the debt-to-GDP ratio has nearly increased sixfold.
The current level of 117.5% is approaching the all-time record of 117.8% recorded in the first quarter of 2021 during the COVID-19 pandemic. At that time, President Emmanuel Macron launched an unprecedented economic rescue effort, pledging to spend “whatever it takes” to prevent economic collapse.
Although the health crisis has long since passed, France’s debt trajectory has not slowed significantly. Within the European Union, only Greece and Italy have higher debt ratios, making France the third most indebted country in Europe.
Warnings from the Court of Auditors
In response to what it views as a critical situation, France’s independent Court of Auditors, responsible for overseeing public finances, issued a warning report describing the state of the nation’s finances as “alarming.”
The report, revealed by France Inter and released ten months before the 2027 elections, calls for “strong, credible, and swift measures” to restore fiscal stability.
The court highlights several aggravating factors. First, France remains the only country in the eurozone whose debt level is higher today than it was at the end of the COVID-19 crisis. Second, public deficits continue to break records. France posted a budget deficit equal to 5.1% of GDP in 2025, the second-highest in the eurozone after Italy.
The government’s goal of keeping the deficit at 5% is viewed as unrealistic by the Court of Auditors, which fears a further deterioration of public finances.
Debt-Interest Costs Are Soaring
A particularly troubling development is the rapid increase in debt-servicing costs. As debt accumulates and interest rates rise in financial markets, the amount spent on interest payments has grown dramatically.
In the current state budget, debt-servicing expenses have become the government’s single largest expenditure category, surpassing spending on the national education system (excluding pension obligations).
Paradoxically, this situation coincides with a significant increase in taxation. Taxes rose by €38 billion across 2025 and 2026 as part of efforts to limit further deficit growth. Yet France already has the highest overall tax burden in Europe when taxes and social contributions are combined.
This creates both political and economic tensions: higher taxes have not been sufficient to slow the growth of public debt, raising questions about the effectiveness of current fiscal measures.
France’s current trajectory highlights a troubling economic reality: structural public spending is growing faster than tax revenues, creating a persistent deficit that is difficult to eliminate.
Programs such as social welfare, pensions, healthcare, and public investment involve long-term commitments, while tax revenues tend to fluctuate with economic conditions.
This divergence between economic growth and debt growth raises a fundamental question for France’s public finances. If GDP expands by only 1% to 2% annually while debt continues to grow by 3% to 4% per year, the debt-to-GDP ratio will inevitably continue rising unless major policy changes are implemented.
French voters heading to the polls in 2027 will likely face a difficult choice between maintaining current levels of public services and restoring fiscal sustainability.
Breaking the Debt Spiral
To reverse the trend, experts and institutions such as the Court of Auditors recommend a combination of measures: controlling the growth of public spending, improving the efficiency of existing expenditures, broadening the tax base without increasing marginal tax rates, and accelerating economic growth to boost revenues.
As the eurozone’s second-largest economy after Germany, France possesses significant economic resources. However, meaningful structural reforms will require political consensus and a willingness to accept difficult compromises.
In the short term, the government must demonstrate that its deficit-reduction commitments are credible. In the medium term, comprehensive reforms of public spending—particularly in pensions and healthcare—appear unavoidable. Over the long term, only sustained economic growth combined with spending discipline will be capable of reversing the debt dynamics that have characterized France for decades.
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