# UK debt hits £3 trillion as inflation surges to 3.5%

> UK's debt mountain tops £3 trillion for the first time ever as inflation hits 3.5% ahead of Budget.
- Title: UK debt hits £3 trillion as inflation surges to 3.5%
- Summary: UK's debt mountain tops £3 trillion for the first time ever as inflation hits 3.5% ahead of Budget. UK's public debt reached £3 trillion for the first time…
- Keywords: debt, inflation, budget, interest rates, chancellor john healey, kemi badenoch, public sector borrowing, gdp, news, entertainment, hits, trillion
- Source: Dailymail — https://dailymail.com/news/article-16225839/Labour-UK-debt-mountain-tax-Budget-inflation-borrowing.html?ito=1490&ns_campaign=1490&ns_mchannel=rss
- Published: 2026-10-21T07:37:07+00:00
- Read time: 2 min
- Topics: uk, debt, inflation, budget, interest rates, chancellor john healey, kemi badenoch, public sector borrowing, gdp, news, entertainment
## UK debt hits £3 trillion milestone
Kemi Badenoch warned of a 'red warning light' on the economy as UK's debt mountain reached £3 trillion for the first time ever.

> There's a red warning light flashing on the economy. Just this morning total government borrowing hit £3trillion, its highest ever.
## Public sector borrowing surges
Official figures showed public sector borrowing rose to £24.5 billion in September, exceeding forecasts by £1.9 billion.
## Inflation rises to 3.5%
UK inflation surged to 3.5 percent in the year to September, driven by rising fuel costs linked to the Iran war.
## Interest rate hikes expected
Analysts predict the Bank of England will increase interest rates next month, adding pressure on mortgage-payers.
## Chancellor prepares fiscal package
Chancellor John Healey will deliver his first fiscal package next Wednesday amid concerns over public finances.
## Debt interest costs rise
Central government debt interest costs reached £10.9 billion in September, up £1.6 billion from the previous year.
## Social benefits spending up
Net spending on social benefits rose by £1.6 billion to £30.6 billion for the month.
## Debt as proportion of GDP falls
Debt as a proportion of GDP decreased by 0.7 percentage points to 94 percent, the lowest level since the early 1960s.
## Shadow chancellor warns of fiscal failure
Shadow chancellor Andrew Griffith called the £3 trillion debt level a 'damning indictment of decades of fiscal failure'.
## Economists predict rate hikes
Nigel Green, chief executive of deVere Group, expects a rate hike in November and another in December.
## Chancellor's fiscal strategy
Chancellor John Healey aims to give 'a bit of breathing space on the costs of living' through targeted spending cuts.
## Public sector debt surpasses £3 trillion
Public sector net debt surpassed £3 trillion for the first time, up £91.7 billion compared with a year earlier.
## Debt interest costs rise
Central government debt interest costs were £10.9 billion for September, up £1.6 billion against the same month last year.
## Inflation driven by fuel costs
UK inflation lifted to an 11-month-high of 3.5 percent last month, partly driven by rising fuel costs linked to the Iran war.
## Chancellor's response to inflation
Chancellor John Healey said the UK is not alone in this, as every country worldwide is suffering from the impact of the Iran war.
## Budget next week
The Chancellor will deliver his first fiscal package next Wednesday, aiming to balance the books through targeted spending cuts.
## Key takeaway

UK's public debt reached £3 trillion for the first time ever, with inflation rising to 3.5% as the government prepares for a Budget amid warnings of economic strain.