Stat of the Nation

Britain's Debt Tops £3 Trillion — And We're Still Borrowing to Pay the Bills

Jamie Jenkins — Wed, 21 Oct 2026 16:16:45 GMT

Britain’s national debt has passed £3 trillion for the first time, according to the latest Office for National Statistics figures.

Despite the government collecting substantially more tax, Britain has borrowed almost £98 billion in the first six months of this financial year, including £64 billion to cover day-to-day government spending rather than net investment.

These are extraordinary sums, but the real concern is what lies behind them. Government spending continues to increase, debt interest is absorbing billions, and higher tax revenues have done little to eliminate Britain’s reliance on borrowing.

And ultimately, the consequences affect all of us through the taxes we pay, the public services we receive and the financial choices facing future governments.

Government Spending Keeps Rising

Between April and September, central government collected almost £27 billion more in tax than during the same period last year. Yet over those same six months, government expenditure increased by nearly £31 billion.

To be clear, total government receipts, including National Insurance and other income, grew slightly faster than expenditure. That has helped reduce borrowing compared with last year, but it doesn’t change the substantial pressure coming from government spending.

Much of the increase is being driven by existing commitments, including welfare payments, pensions, public services and the cost of servicing government debt. These are areas where expenditure can continue rising even without significant improvements in what taxpayers receive.

More concerningly, government expenditure was almost £9 billion higher than the Office for Budget Responsibility expected. Higher-than-forecast debt interest and benefit payments, including pensions, were among the biggest pressures.

This is the challenge facing the Chancellor. Even with additional revenue coming into the Treasury, existing spending commitments are proving more expensive than anticipated.

And that raises a fundamental question about whether Britain can continue expanding its expenditure without making much more difficult decisions about priorities, efficiency and what the country can realistically afford.

Borrowing Just to Keep Government Running

Perhaps the most troubling finding is that Britain continues to borrow substantial sums simply to meet its everyday spending commitments.

Of the £98 billion borrowed during the first six months of the financial year, around £64 billion represents the current budget deficit. This is borrowing associated with the day-to-day costs of government, rather than net investment in infrastructure and other assets.

Borrowing to invest in projects that generate long-term economic benefits can make financial sense. But consistently borrowing because current revenues cannot cover current spending creates a very different challenge.

That doesn’t mean the money is being wasted. Healthcare, education, pensions and other public services are important commitments, and governments sometimes have good reasons to run deficits.

Nevertheless, a government that continually relies on borrowing to finance existing commitments risks leaving future taxpayers with an increasingly difficult financial burden.

The current deficit has improved compared with last year, but it remains above forecast. Britain is still living beyond the revenues available to finance its day-to-day public sector activities.

Debt Interest — Billions Spent Before We Improve a Single Service

One of the biggest problems with carrying so much debt is the cost of servicing it.

In the first six months of this financial year, central government incurred almost £61 billion in debt interest. September alone accounted for £10.9 billion, the highest September figure since monthly records began in 1997, although not adjusted for inflation.

Think about what that means. Before the government can allocate additional money to improving hospitals, schools, roads or other public services, it already faces enormous financial obligations arising from money borrowed in the past.

In that sense, debt interest is effectively dead money from the perspective of delivering new public services. It doesn’t employ additional nurses, repair a road or build a school. It is the cost of financing existing debt, including borrowing that may have funded valuable spending or investment in previous years.

And the problem becomes more difficult when interest costs rise. The government must either find more revenue, reduce spending elsewhere or borrow additional money to accommodate those costs.

Inflation adds another complication. As I explained in my earlier article, price pressures are increasing again, affecting households and businesses. Inflation also raises the amount owed on some government bonds linked to the Retail Prices Index, although part of that cost accrues before it is paid.

This is why Britain’s debt burden matters. It’s not simply the enormous amount we owe, but the financial commitments that come with servicing it and the choices those commitments restrict.

Why Should Taxpayers Care?

It’s easy to dismiss national debt as an abstract figure that only economists and politicians need to worry about. But these financial pressures have consequences for ordinary households.

When government spending rises simply to maintain existing commitments, taxpayers can end up contributing more without necessarily receiving better services. Additional funding may be swallowed up by higher costs before improvements in healthcare, education or infrastructure are delivered.

Meanwhile, the more money committed to debt interest, the less flexibility government has to finance other priorities without raising taxes, cutting expenditure elsewhere or borrowing further.

With the Budget approaching on 28 October, the Chancellor faces some difficult choices. Further tax increases could put additional pressure on households and businesses, while meaningful spending restraint requires decisions about government priorities and the effectiveness of public services.

There has been some improvement in the public finances. Borrowing is lower than last year, and national debt has fallen slightly relative to the size of the economy. Those developments are welcome, but they don’t remove the underlying challenge of rising expenditure and continued borrowing.

I don’t believe Britain can simply keep turning to taxpayers whenever government spending commitments become more expensive. We need stronger economic growth, greater scrutiny of expenditure and a willingness to question whether existing programmes are delivering the outcomes they should.

That doesn’t mean cutting spending indiscriminately. It means recognising that governments have limited resources and that every pound allocated to one priority is a pound unavailable for another without raising additional money.

Britain doesn’t just need more tax revenue. It needs to get a much better grip on government spending and demonstrate that taxpayers are receiving value for their money.

Because when we’re collecting billions more in tax, borrowing to meet everyday costs and spending extraordinary sums servicing existing debt, surely it’s time to ask whether the current approach is sustainable.

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Stats Jamie | Stats, Facts & Opinions

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Inflation Is Rising Again — And Higher Mortgage Costs Could Be Next

Jamie Jenkins — Wed, 21 Oct 2026 06:50:16 GMT

Britain’s inflation problem is moving in the wrong direction again.

The latest Office for National Statistics figures, published today, show annual inflation rising to 3.5% in September, up from 3.1% in August and 2.6% in June.

That’s the highest rate since October 2025, moving inflation further away from the Bank of England’s 2% target.

The biggest driver has been soaring fuel prices, largely reflecting disruption to global energy markets.

But the consequences could stretch far beyond the petrol station, potentially affecting mortgages, government borrowing and public spending.

Inflation Is Rising Again

The headline Consumer Prices Index (CPI) rose by 3.5% over the year to September, while the broader CPIH measure, which includes owner-occupiers’ housing costs, increased to 3.6%.

Underlying inflationary pressures have also strengthened:

Core inflation: 2.8%, up from 2.6%.
Goods inflation: 3.2%, up from 2.7%.
Services inflation: 3.7%, up from 3.4%.

Goods inflation is now at its highest since September 2023.

The Bank of England will be watching closely for signs that higher energy prices are spreading into wider prices and wages.

Where Are Prices Rising Fastest?

The latest ONS figures reveal some significant differences across household spending.

Transport costs are up 6.6%, communications 5.8%, housing and household services 5.3%, and education 5.0%.

Housing remains a particular pressure, with owner-occupiers’ housing costs rising 4.0% over the year.

There is, however, some better news.

Food inflation remains at just 1.3%, its lowest annual rate since September 2021, while inflation in restaurants and hotels eased from 4.1% to 3.8%.

But those improvements haven’t been enough to offset renewed inflation elsewhere.

Fuel Prices Have Risen Nearly 30%

Transport was the largest contributor to September’s increase in the annual inflation rate, driven particularly by motor fuels.

According to the ONS, petrol averaged 169.5p per litre in September, while diesel reached 192.5p.

Motor fuel prices were 29.8% higher than a year earlier.

And September’s figures are already dated.

The latest reported forecourt averages from Fuel Finder UK put diesel at approximately 198.8p per litre on 21 October.

At that price, around 86p of every litre is fuel duty and VAT.

As fuel prices rise, the amount of VAT charged per litre also increases, even though the tax rate itself remains unchanged.

Global energy disruption explains much of the surge in pump prices, but domestic fuel taxation remains a government policy decision.

Could Mortgage Costs Rise Further?

Perhaps the most worrying consequence of persistently higher inflation is the potential impact on borrowing costs.

The Bank of England’s main interest rate currently stands at 3.75%.

But mortgage rates have already increased.

In its September Monetary Policy Committee minutes, the Bank reported that quoted two-year fixed mortgage rates were approximately 0.95 percentage points higher than before the Middle East conflict.

That’s despite Bank Rate remaining unchanged.

Financial markets have already adjusted to expectations of higher interest rates, pushing up the cost of new mortgage deals.

The Bank now faces a difficult balancing act.

Increasing interest rates cannot directly resolve global energy supply disruptions. But allowing inflation to become embedded in wider prices and wages could create longer-term problems.

The last thing households need, when already facing higher fuel, energy and everyday living costs, is another increase in mortgage repayments.

Inflation Also Puts Pressure on Government Finances

Higher inflation doesn’t just affect households. It can also put further pressure on the public finances.

When investors expect inflation and interest rates to remain higher, they may demand higher yields on government bonds, known as gilts.

That can increase the cost of new government borrowing and refinancing existing debt.

The Government is also exposed through inflation-linked debt.

According to the Treasury’s Debt Management Report, the UK had approximately £688.5 billion of index-linked government debt at the end of December 2025.

Payments on these gilts are linked to the Retail Prices Index (RPI), which reached 3.9% in September.

Higher RPI inflation increases the costs associated with that debt.

Then there’s benefit expenditure.

September’s CPI figure is used to determine increases in many working-age benefits the following April, subject to the relevant uprating rules.

With CPI at 3.5%, this creates further inflation-linked spending commitments for 2027–28, helping protect recipients against rising prices but adding to pressures on public expenditure.

Higher inflation can therefore affect government finances through both debt costs and spending.

The Bottom Line

The latest figures show Britain’s inflation problem is far from resolved.

Headline inflation is rising, fuel prices have surged, and underlying price pressures are strengthening.

There are some encouraging signs, particularly in food inflation, but the wider economic risks are considerable.

Higher inflation could mean higher mortgage costs, more expensive government borrowing and increased inflation-linked public spending.

Much of the latest energy shock originates overseas, beyond Britain’s direct control.

But domestic economic policy will play an important role in determining how households and businesses cope.

With the Bank of England facing another difficult interest-rate decision, the last thing families need is a further squeeze on their finances.

How much more pressure can households and the public finances absorb?

Thanks for reading Stat of the Nation. I break down the statistics behind the headlines, cutting through the political spin to explain what’s really happening across Britain.

If you value independent, evidence-based analysis, please share this article and subscribe for more statistics behind the headlines.

✍️ Jamie Jenkins
Stats Jamie | Stats, Facts & Opinions

Labour's Economic Reality: Weak Growth, Falling Construction and Jobs Under Pressure

Jamie Jenkins — Tue, 20 Oct 2026 21:22:58 GMT

I joined Mike Graham on the to discuss the latest economic figures, Labour’s struggling housebuilding ambitions, the difficulties facing young people entering the jobs market and the continuing squeeze on household finances.

Watch our full conversation below.

Britain’s Economy Barely Grows

The latest Office for National Statistics figures showed the UK economy growing by just 0.1% in August 2026.

Growth over the three months to August was stronger at 0.7%, but look beneath that headline and the picture is far less encouraging.

While services helped drive overall growth, construction continued to struggle.

And that’s particularly concerning for a government that promised to get Britain building again.

Labour’s 1.5 Million Homes Promise

Labour entered government promising to deliver 1.5 million new homes in England during this Parliament.

More than two years later, the numbers aren’t looking encouraging.

The latest ONS figures show:

Construction output fell 1.0% in the three months to August.
Private new housing work fell 3.2% over the same period.
Construction output declined for four consecutive months, including a further 0.2% fall in August.

Meanwhile, the latest government housing supply estimates paint a difficult picture:

208,600 net additional homes in England during 2024–25.
196,900 estimated during 2025–26.
437,900 estimated since the start of Parliament in July 2024, up to 20 September 2026.

That last figure includes homes delivered during the current financial year and excludes those completed before this Parliament began.

The figures for 2025–26 onwards are provisional estimates, but they suggest that just 29% of Labour’s 1.5 million homes target has been achieved.

That leaves another 1.06 million homes to deliver before the end of Parliament.

And it’s not simply about meeting a political target.

Britain desperately needs more housing to tackle affordability, relieve pressure on rents and give younger generations a realistic chance of getting onto the property ladder.

Labour promised to get Britain building. Yet construction is contracting, and housebuilding needs to accelerate substantially to meet its target.

Jobs, Hospitality and Young Workers

We also discussed the pressure facing Britain’s hospitality sector.

The latest figures showed accommodation and food services output falling by 2.1% in August, another disappointing month for businesses already facing substantial costs.

Higher employers’ National Insurance contributions, rising wage bills and pressure on margins have made employing people more expensive.

My concern is what this means for young people trying to enter the workforce.

Businesses need an incentive to take a chance on someone without years of experience. When the cost of employment rises, particularly for entry-level positions, employers have another reason to think twice before recruiting.

There’s little point celebrating higher minimum wages if businesses become increasingly reluctant to employ young people in the first place.

The challenge for government is finding the right balance between improving pay and ensuring employers are willing to create opportunities.

Getting young people onto the jobs ladder should be a priority, not an afterthought.

The Cost of Living Hasn’t Gone Away

We also revisited my recent Stat of the Nation analysis examining how much the cost of everyday essentials has increased since 2019.

Energy, food, rents and transport have all become substantially more expensive, eating into household pay increases and putting pressure on living standards.

The Bigger Picture

Labour promised economic growth, more homes and better opportunities.

But promises are one thing. Delivery is another.

With construction contracting, businesses facing rising costs and more than a million homes still needed to meet its housing target, the government has some serious challenges ahead.

Britain needs investment, businesses willing to employ people and a housing sector capable of delivering the homes the country desperately needs.

Britain doesn’t need another housing target. It needs houses actually being built.

Thanks for reading Stat of the Nation. I break down the statistics behind the headlines, cutting through the political spin to explain what’s really happening across Britain.

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✍️ Jamie Jenkins
Stats Jamie | Stats, Facts & Opinions

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£2 Diesel, £3 Trillion Debt: What Can the Chancellor Do?

Jamie Jenkins — Sun, 18 Oct 2026 09:39:59 GMT

Diesel has reached £2 a litre, government debt is approaching £3 trillion, and the Chancellor faces another difficult Budget.

But here’s a statistic you might not have considered. As diesel prices have increased since February, the VAT included in every litre has risen by almost 10p.

I joined Nana Akua on GB News this weekend to discuss Britain’s cost-of-living squeeze, the growing pressures on the public finances and what John Healey could do in his first Budget on 28 October.

Watch our full discussion below.

Inflation Is Hitting Households and the Treasury

The war in Iran has added another complication to Britain’s economic problems, with higher oil and gas prices feeding through into household bills and business costs.

The latest ONS figures show CPI inflation at 3.1% in August, while Ofgem’s energy price cap increased by 4% in October for a typical household on a variable tariff.

But inflation doesn’t just hit households. It also increases the cost of servicing Britain’s inflation-linked government debt, feeds into future benefit uprating and raises the cost of delivering public services.

And the public finances are already stretched.

Government debt stood at £2.99 trillion at the end of August, while borrowing in the first five months of the financial year reached £77.3 billion, some £8.1 billion above forecast, although £2.2 billion lower than the same period last year.

That’s the difficult backdrop facing the Chancellor.

Diesel at £2 a Litre: The Treasury Collects More VAT

One statistic I highlighted during the interview deserves particular attention.

According to the government’s weekly road fuel statistics, average diesel prices have increased substantially:

23 February 2026: 141.46p per litre
12 October 2026: 200.04p per litre
Increase: 58.58p per litre

Because VAT is charged at 20%, the amount of VAT included in each litre has increased by approximately 9.8p.

So while motorists are paying almost 59p more for every litre, the Treasury is collecting nearly 10p more in VAT per litre sold.

That doesn’t necessarily mean overall VAT receipts have increased, as higher prices can discourage consumption.

But it raises a reasonable question.

Should the Chancellor give motorists some relief by reducing fuel duty rather than simply continuing to freeze it?

Any reduction would need funding, but the pressure on motorists and businesses is undeniable.

What Should the Chancellor Do?

My argument during the interview was straightforward. Britain cannot keep relying on higher taxation and borrowing to fund ever-growing spending commitments.

We need an economy that encourages businesses to invest, recruit and grow.

The latest ONS figures show 981,000 young people aged 16–24 are not in employment, education or training. Not all are claiming benefits, but improving opportunities for this group should be an important economic priority.

The Chancellor could look at reducing employment costs, providing targeted relief on fuel and energy, and reforming public spending to deliver better value for taxpayers.

Of course, tax cuts and additional support have costs of their own. There are no easy answers when borrowing remains high.

But the underlying challenge is bigger than one Budget.

Britain is approaching £3 trillion of debt, the tax burden is heading towards record levels, and inflation is adding further pressure to household and government finances.

How does Britain get back to sustainable public finances without continually asking taxpayers to pay more?

That’s the question John Healey needs to answer.

Thanks for reading Stat of the Nation. I break down the statistics behind the headlines, cutting through the political spin to explain what’s really happening across Britain.

If you value independent, evidence-based analysis, please share this article and subscribe for more statistics behind the headlines.

✍️ Jamie Jenkins
Stats Jamie | Stats, Facts & Opinions

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What's the Point of Statistics If They Don't Make a Difference?

Jamie Jenkins — Fri, 16 Oct 2026 16:03:42 GMT

When I took over the Labour Market Analysis team at the Office for National Statistics (ONS) around 2008, I remember asking colleagues why we were producing a particular article.

The answer was simple. Because it had to go in the quarterly publication.

But I had a rather different question. Who was actually going to read it?

We were producing enormous publications, almost like books, without necessarily asking whether the information was making any difference.

And that mattered because taxpayers were funding the work.

I subsequently helped lead a programme within the ONS looking at the impact of official statistics, something I’ve always considered fundamental to their purpose.

Nearly two decades later, I still believe we’re not asking that question often enough.

For me, statistics have two fundamental purposes: to help us make better-informed decisions and to give the public the evidence to hold those in power to account.

Everything else should flow from those principles.

Producing Statistics Isn’t Enough

During my career, I’ve sat in meetings in Whitehall with senior ministers who struggled to grasp the data being discussed. I’ve also worked in the BBC newsroom and seen how journalists can struggle to interpret numbers.

And these are people making decisions or communicating information that affects millions of lives.

That illustrates a fundamental problem. Producing accurate statistics is only half the job.

If the people making decisions cannot understand them, or the public cannot interpret what they’re being told, the value of those statistics is diminished.

We don’t necessarily need more statistics. We need statistics that people can understand, trust and use.

What Happens When the Data Isn’t Reliable?

There’s another challenge, one that goes to the heart of public confidence in official statistics.

The quality of the underlying data.

Take Britain’s Labour Force Survey, which underpins our estimates of employment, unemployment and economic inactivity.

It’s a survey I worked with extensively during my time at the ONS.

Yet the latest published figures for April to June 2026 show a response rate in Great Britain of just 22.8%, excluding imputed cases.

That’s fewer than one in four eligible households responding across the survey waves.

Statisticians can use weighting and other techniques to compensate for missing responses. But those adjustments cannot automatically eliminate the risk of bias, particularly if the people who don’t respond differ systematically from those who do.

A low response rate doesn’t make every estimate wrong. It does, however, make understanding the limitations increasingly important.

That’s why, when examining changes in employee numbers, I now place considerable weight on administrative data collected through HMRC’s PAYE system.

These records provide a much more comprehensive measure of payrolled employment than a household survey. They don’t replace the Labour Force Survey for measuring unemployment, self-employment or economic inactivity.

Indeed, recent ONS research supports PAYE data as the most reliable current measure of employee numbers.

If we’re going to make important decisions using statistics, we must have confidence in the evidence underpinning them.

Can Government Statistics Be Truly Independent?

Then there’s the question of independence.

Britain has a Government Statistical Service, with statisticians working across different government departments.

These statisticians operate under professional standards designed to protect their independence, and many do excellent work.

But I’ve long questioned whether the current arrangements go far enough.

Should the same government departments responsible for delivering policies also be responsible for producing and publishing the statistics used to judge their performance?

Consider the controversy surrounding crime statistics broken down by nationality.

In June 2026, the Information Commissioner’s Office ruled that the Ministry of Justice had failed to justify withholding requested conviction figures under the cost exemption it cited. The Commissioner also found that the personal-information exemption did not apply to counts of five or more.

The Ministry of Justice has appealed that decision, with the government confirming in September that proceedings remained ongoing.

There are legitimate considerations around privacy, disclosure risks and data quality. But this case raises wider questions about public access to politically sensitive information.

Statistics funded by taxpayers should be available for public scrutiny wherever lawful and appropriate.

I believe there’s a strong case for greater separation between government departments responsible for policy and the organisations responsible for publishing the evidence used to assess it.

A more centralised, visibly independent statistical system deserves serious consideration.

Not because government statisticians are necessarily politically influenced, but because the independence of official statistics must be demonstrable, not simply assumed.

Statistics Must Serve the Public

We spend substantial sums of public money collecting, analysing and publishing statistics.

That investment should deliver something meaningful.

We need reliable data, transparent methods, genuinely independent publication and a willingness to acknowledge when things go wrong.

But above all, we need to remember why we’re producing statistics in the first place.

Not to fill government reports. Not to provide convenient headlines for politicians. And certainly not to create the illusion that complex political arguments can be settled with a single percentage.

Statistics should help us make better decisions and hold those in power to account.

If we’re not achieving those two things, something needs to change.

Discussing This at the Battle of Ideas

Tomorrow, Saturday 17 October, I’ll be speaking at the Battle of Ideas Festival in Westminster, joining a panel discussing Lies, damned lies… let’s talk about stats.

Academy of Ideas

Battle of Ideas festival 2026: let Battle commence!

7 days ago · 12 likes · Claire Fox

We’ll be examining trust in official statistics, political manipulation of figures, independence and whether the evidence we rely upon is still fit for purpose.

It’s a debate that matters far beyond the world of statistics.

Because without reliable evidence, we’re left with little more than competing opinions.

✍️ Jamie Jenkins
Stats Jamie | Stats, Facts & Opinions

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Five Years of Rising Bills: Why Pay Rises Haven’t Ended the Cost-of-Living Squeeze

Jamie Jenkins — Wed, 14 Oct 2026 16:40:36 GMT

Almost £6,400 a year. That’s how much more an illustrative renting household could now be paying for food, energy, rent and petrol compared with five years ago.

That’s an additional £533 every month, simply to cover the increased cost of everyday essentials.

I’ve analysed five years of official statistics, comparing August 2021 with August 2026, to understand how much the cost of living has changed.

The findings are striking. Domestic energy prices have increased by 64.7%, food by 38.2%, average private rents by 34.7%, and transport by 20.9%.

Overall consumer prices increased by 28.1% over the same period.

While inflation has slowed considerably from its peak, most prices haven’t returned to their previous levels.

Where does the additional £6,400 come from?

My calculation combines four annual costs:

Food: £1,192 extra, based on a £60 weekly shop in 2021.
Gas and electricity: £685 extra, using identical energy consumption.
Rent: £4,332 extra, comparing average UK private rents.
Petrol: £190 extra, based on a driver covering 6,200 miles annually.

Together, these amount to approximately £6,400 more every year.

This is an illustrative household, rather than an official estimate of the national average. But it demonstrates how rising essential costs can quickly add up to thousands of pounds.

Food: Nearly 40% More Expensive

Perhaps nowhere is the increase in everyday costs more obvious than in the supermarket.

My analysis of the ONS Consumer Price Index shows that food prices increased by 38.2% between August 2021 and August 2026.

A basket of groceries costing £100 five years ago would now cost approximately £138.

But some everyday foods have increased considerably faster.

Olive oil has more than doubled in price, increasing by 109.7%. Sugar is up 66.5%, beef and veal 60.4%, and eggs 56.1%.

Even low-fat milk has risen by nearly 48%, while bread is approximately 30% more expensive.

For a household spending £60 a week on groceries five years ago, maintaining the same shopping basket would now cost almost £83.

That’s approximately £1,200 extra every year, without buying any more food.

For a larger household previously spending £100 a week, the additional cost approaches £2,000 annually.

Families have responded by switching supermarkets, choosing cheaper products and cutting back on purchases.

For many households, the reality is that they’re paying more while consuming less.

Energy: Nearly £700 More for the Same Usage

Domestic energy has experienced some of the largest increases of the past five years.

According to the ONS, gas prices have risen 88.3%, electricity 46.4%, and domestic energy prices overall 64.7% since August 2021.

Prices surged during 2022 and early 2023 before falling back from their peak. Despite those reductions, they remain substantially higher than five years ago.

Using identical annual consumption in both periods, based on Ofgem’s current typical-use assumptions, I’ve calculated that an annual gas and electricity bill increased from approximately £979 in August 2021 to £1,664 in August 2026.

That’s an additional £685 a year, or £57 every month, without using any more energy.

And prices increased again in October, taking the Ofgem price cap to £1,723 for typical annual consumption.

Households have also reduced their energy use, partly because higher bills have forced families to cut back on heating their homes.

Energy-efficiency improvements have contributed, but affordability has been an important factor.

For many, higher bills have meant paying more for energy while using less of it.

Housing: Another £4,300 a Year in Rent

Housing represents one of the largest expenses most households face.

The latest ONS private rental statistics show that average UK private rents increased from approximately £1,039 a month in August 2021 to £1,400 in August 2026.

That’s an increase of 34.7%, or £361 a month.

Over a year, the difference amounts to £4,332.

These figures compare national average rents at two points in time, rather than the increase experienced by individual tenants. Nevertheless, they illustrate how substantially the cost of renting has changed.

Mortgage holders have faced their own pressures as borrowing costs increased, particularly when coming off cheaper fixed-rate deals.

And unlike discretionary purchases, housing is a cost households cannot easily avoid.

Transport: Petrol and Diesel Rising Again

Overall transport prices have increased by 20.9% since August 2021, but recent fuel-price increases are particularly concerning.

The latest government road fuel statistics show petrol reaching 175.28p per litre and diesel 200.04p per litre in October.

Since February 2026 alone, petrol has increased by almost 44p per litre and diesel by nearly 59p.

That’s approximately £24 more to fill a 55-litre petrol tank and £32 more for diesel.

For an illustrative petrol driver covering 6,200 miles annually at 40 miles per gallon, the five-year increase added approximately £190 to annual fuel costs by August 2026. At October’s higher prices, that rises to around £286 compared with August 2021.

And the consequences extend beyond motorists.

Higher fuel costs affect hauliers, farmers, delivery companies and manufacturers. Sustained increases can eventually feed through into the prices of goods and services.

Why the Poorest Households Are Hit Hardest

Perhaps the most important finding is that rising prices don’t affect everyone equally.

Lower-income households generally devote a much greater proportion of their spending to essentials, leaving less flexibility when bills increase.

I’ve analysed the latest ONS Family Spending figures for 2024/25, including detailed expenditure figures by household income.

The difference is striking.

The lowest-income fifth of households devoted 40.3% of their total expenditure to food, housing, fuel and power.

For the highest-income fifth, the equivalent figure was just 20.7%.

In other words, lower-income households devoted almost twice the proportion of their spending to these necessities.

The housing, fuel and power category includes rent and other housing expenses, not simply gas and electricity. These are shares of household expenditure rather than income.

When such a large proportion of household spending is already committed to essentials, there is far less room to absorb further increases.

Have Earnings Kept Up With Rising Bills?

Of course, wages have also increased, helping households absorb some of these higher costs.

According to the ONS average weekly earnings figures, average regular earnings increased by approximately 29.5% between August 2021 and July 2026.

That’s broadly in line with overall inflation, but below the increases in food, energy and average private rents.

And those earnings figures are before tax.

Take someone earning £30,000 a year in 2021. If their salary increased in line with average earnings, they would now earn approximately £38,850.

After Income Tax and employee National Insurance, their annual take-home pay would have increased from approximately £24,062 to £31,492.

That’s an additional £7,430 a year.

But if that worker also faced the higher food, energy, rent and motoring costs in our illustrative household, those increases would absorb approximately 86% of their additional take-home pay.

That leaves just over £1,000 of the annual pay increase to cover rising costs elsewhere.

This is a hypothetical comparison, not the experience of every worker. Income Tax threshold freezes have increased tax liabilities relative to inflation-linked thresholds, while reductions in employee National Insurance have offset some of that effect.

Nevertheless, it illustrates an important point.

Even substantial pay rises can be largely absorbed by higher essential bills, leaving households with little additional spending power.

Looking Ahead: Another Energy Shock in January?

And the concern now is what happens next.

Households have already absorbed five years of substantial price increases, but another significant rise in domestic energy bills could be approaching.

The current Ofgem price cap stands at £1,723 annually for a typical dual-fuel household.

However, MoneySavingExpert’s comparison of energy supplier forecasts from early October suggests the cap could rise by 20.9% in January 2027, reaching approximately £2,084.

That’s another £361 on an annualised basis compared with October.

These are forecasts, not confirmed increases. The January cap will be announced by Ofgem in November, and the additional amount paid during the winter quarter will depend on actual consumption.

But the potential consequences extend beyond household energy bills.

Higher energy costs affect food production, manufacturing, refrigeration, transport and distribution. Businesses may absorb some of those increases, but others could eventually pass them on through higher prices.

Another sustained energy shock risks feeding through into everyday costs, adding further pressure to households already dealing with five years of inflation.

It also creates a challenge for the Bank of England. Higher interest rates cannot directly resolve international energy shortages, although monetary policy remains important in preventing temporary price shocks from becoming persistent inflation.

The five-year figures reveal how much more expensive everyday life has become. And although average earnings have broadly kept pace with overall inflation, the costs of several essential goods and services have risen much faster.

For households already spending a large proportion of their budgets on necessities, that distinction matters.

The real question isn’t simply whether inflation is coming down. It’s whether people can afford the cost of everyday life after five years of sharply rising prices.

✍️ Jamie Jenkins
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Small Boats Keep Coming. Wealth Keeps Leaving. Britain Keeps Paying

Jamie Jenkins — Sun, 11 Oct 2026 07:01:10 GMT

I joined Mike Graham again on the this week to discuss some of the biggest issues facing Britain, and the numbers behind them.

We covered another surge in small boat arrivals, growing concerns about wealthy individuals and entrepreneurs leaving the UK, and a tax system that increasingly squeezes working households. We also looked at rising petrol, diesel and energy prices, and why successive governments seem to make life more expensive rather than easier.

Watch our full conversation below.

1,620 Small Boat Arrivals in Just Five Days

We started with the latest Home Office figures, showing 1,620 people arriving in small boats between 2 and 6 October.

That’s more than 300 people a day, despite repeated government promises to tackle the crossings.

Mike and I discussed the effectiveness of the government’s approach, the pressures on the asylum system and the failure to establish a credible deterrent.

My argument was straightforward. Unless people believe that making the crossing will not guarantee them entry into Britain, the incentive to attempt the journey remains.

When Wealth Leaves Britain, Who Pays the Price?

We then turned to reports that billionaires with a combined £121 billion in wealth have left or loosened their ties with the UK since 2024.

That doesn’t mean £121 billion has physically left the economy, but it raises important questions about Britain’s attractiveness to investors and entrepreneurs.

As I explained to Mike, the potential loss goes beyond the individuals themselves. It’s the businesses they might establish, the jobs they could create and the future taxes those activities would generate.

And with the top 1% of income taxpayers contributing around 27% of income tax revenues, losing even a relatively small number of high contributors could have consequences.

We also discussed my preference for a simpler, flatter tax system and the absurdities of taxing people heavily only to give some of that money back through benefits.

Higher Fuel Prices, More Tax and Britain’s Energy Problem

Finally, we discussed the growing cost of simply getting on with everyday life.

With petrol and diesel prices rising sharply, motorists are paying more at the pumps, businesses face higher transport costs and consumers ultimately feel the impact.

There’s another sting in the tail. As fuel prices rise, the amount of VAT collected on every litre rises too. Households pay more while the Treasury collects more tax per litre.

We finished by discussing Britain’s wider energy policies, our reliance on imported gas and the consequences of closing domestic energy infrastructure.

For me, it comes back to a simple principle. Governments are elected to work for the people, not to make the people work harder to fund ever-increasing government spending.

✍️ Jamie Jenkins
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Labour Wins Again, Polanski Loses, But the Numbers Tell a Different Story

Jamie Jenkins — Sat, 10 Oct 2026 07:02:16 GMT

Labour has won the Holborn and St Pancras by-election, defeating Green Party leader Zack Polanski and giving Prime Minister Andy Burnham a welcome political victory.

But before we get carried away, there is something worth remembering.

Labour has won every election in Holborn and St Pancras since the constituency was created in 1983.

This was not a Labour gain. It was the successful defence of a seat the party has held for 43 years, previously represented by Keir Starmer.

Nevertheless, there are some interesting numbers behind the result. Labour’s majority has narrowed, Polanski has failed to turn considerable Green support into a parliamentary victory, and national polling suggests Burnham is recovering support lost under his predecessor.

I joined GB News to discuss the by-election, the challenges facing the Greens and what the latest polling could mean for the next general election.

Labour Wins, But Its Majority Has Shrunk

Labour’s Sagal Abdi-Wali secured 12,292 votes, equivalent to 45.2% of the total. Zack Polanski finished second with 8,928 votes, or 32.8%.

That gave Labour a majority of 3,364 votes.

Compare that with the 2024 general election, when Starmer won 48.9% of the vote and secured a majority of 11,572.

Labour’s vote share has fallen by 3.7 percentage points, while its majority has dropped by more than 8,000 votes.

But turnout matters.

In 2024, turnout was 54.1%. At the by-election, it fell to just 38.76%, a decline of more than 15 percentage points.

Fewer than four in ten eligible voters participated, so simply comparing the number of votes in Labour’s majority risks exaggerating the change.

The more revealing statistic is Labour’s lead over its nearest challenger. That narrowed from approximately 30 percentage points in 2024 to just 12.4 points in the by-election.

Of course, the identity of the runner-up also changed, and differences in turnout mean we cannot assume the same voters switched directly from Labour to the Greens.

Nevertheless, Labour’s share of the vote has declined, and its lead over the main challenger is considerably smaller than it was two years ago.

That is important context when assessing claims of a decisive electoral breakthrough.

Did the Greens Really Surge?

At first glance, the Green Party’s performance looks remarkable.

Its vote share increased from 10.4% at the 2024 general election to 32.8% in the by-election.

An increase of 22.4 percentage points sounds like an extraordinary surge.

But there is a crucial detail missing from that comparison.

In 2024, independent candidate Andrew Feinstein secured 18.9% of the vote, finishing second behind Starmer. Feinstein subsequently backed Polanski, while the Camden People’s Alliance, which had previously supported Feinstein, also endorsed the Green candidate.

Add the 2024 Green and Feinstein vote shares together and the total is 29.3%.

Compare that with Polanski’s 32.8% and the difference is just 3.5 percentage points.

This does not mean every Feinstein supporter voted Green, nor does it allow us to identify individual voting movements between the two elections.

But the figures are consistent with much of the apparent Green surge reflecting the consolidation of an existing left-of-Labour vote rather than an entirely new wave of support.

And after all that, Polanski still failed to win.

The defeat also comes amid controversy within the Green Party following its conference vote on Zionism, which attracted criticism from senior figures including former leader Caroline Lucas and Green MP Siân Berry.

We cannot know whether the controversy influenced enough voters to change the outcome, but it has added to the pressure on Polanski following his defeat.

The Greens have demonstrated that they can mount a substantial challenge in an established Labour constituency. What they have not demonstrated is an ability to convert that support into a Westminster seat in this contest.

The Burnham Bounce: Labour Is Recovering Nationally

While the by-election tells us about one London constituency, the national opinion polls provide a broader picture.

And there is evidence that Labour’s position has improved significantly since Andy Burnham replaced Keir Starmer.

In YouGov polling conducted around the leadership transition in July, Labour stood at 20%. By early October, that had increased to 27%, a rise of seven percentage points.

Survation tells a similar story. Labour has risen from 24% in its final pre-Burnham polling to 30% in its latest survey, conducted between 2 and 5 October.

That latest Survation poll also puts Reform UK on 24%, the Conservatives on 19%, the Liberal Democrats on 9% and the Greens on 8%.

Across recent national polls, Labour is averaging approximately 28%, compared with around 23% for Reform, 19% for the Conservatives and 10% each for the Greens and Liberal Democrats.

That represents a considerable improvement for Labour.

But there are two important qualifications.

First, Labour won 33.7% of the national vote at the 2024 general election. Even after its recovery, the party remains several points below the support that delivered its parliamentary landslide.

Second, the improvement is not simply the result of Reform losing large numbers of voters.

In the comparable YouGov polls, Labour has gained seven percentage points since July while Reform has fallen by just one.

The recovery therefore appears to involve Labour winning back former supporters and improving its position against other parties, rather than relying on a major collapse in Reform’s vote.

YouGov’s research also indicates that public attitudes towards Labour have improved under Burnham, although views of the party remain considerably less favourable than views of the Prime Minister personally.

And we should be careful about attributing the entire improvement to one politician. Survation has identified an upward trajectory for Labour beginning in June, before Burnham entered Downing Street.

Nevertheless, Labour’s national recovery is measurable, and the party is now in a much stronger polling position than it was during the final months of Starmer’s leadership.

The national polls provide more compelling evidence of that improvement than a by-election victory in a constituency Labour has held for more than four decades.

Could Labour Win Another Election With Less Than 30%?

The polling also raises a fascinating question about Britain’s electoral system.

Could Labour secure another parliamentary majority while winning less than 30% of the national vote?

Potentially, yes.

At the 2024 general election, Labour won 411 of the 650 parliamentary seats despite securing just 33.7% of the vote.

Reform UK, by comparison, received 14.3% but won only five seats.

The Liberal Democrats secured 12.2% and won 72 seats.

That is the extraordinary effect of first-past-the-post.

It is not simply how many votes a party receives nationally, but where those votes are concentrated.

With Reform UK and the Conservatives competing for many of the same voters, Labour could benefit from a divided opposition even if its own national vote share remains relatively modest.

At the same time, the Greens could continue threatening Labour in urban constituencies, while the Liberal Democrats remain competitive elsewhere.

This makes translating national voting intention into parliamentary seats particularly difficult. Small changes in the distribution of votes could produce very different election results.

Labour does not necessarily need to return to its 2024 vote share to remain competitive for another majority.

But a polling lead today is no guarantee of an election victory, particularly when the next general election could still be years away.

What Do the Numbers Really Tell Us?

Labour has held a constituency it has never lost, while Zack Polanski has failed to turn substantial Green support into a parliamentary victory.

The reduction in Labour’s majority is significant, although low turnout and the presence of a prominent independent candidate in 2024 complicate direct comparisons.

And the apparent Green surge looks much less dramatic once the previous independent vote is considered.

But the bigger political story may be emerging in the national polls.

Labour has recovered six or seven percentage points in comparable surveys around the leadership transition, even though its support remains below the level recorded at the 2024 general election.

With the opposition vote divided between Reform, the Conservatives, the Greens and Liberal Democrats, that recovery could have substantial consequences when Britain next goes to the polls.

Burnham has won the by-election. The question now is whether he can win back the country.

And on that question, the national polling is increasingly encouraging for Labour, but the verdict is far from settled.

✍️ Jamie Jenkins
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Diesel Hits £2 a Litre, And You’ll Pay Even If You Don’t Drive

Jamie Jenkins — Thu, 08 Oct 2026 12:17:49 GMT

Diesel has effectively hit £2 a litre, while petrol has climbed to nearly £1.75.

For someone driving around 7,000 miles a year, maintaining today’s prices could mean roughly £300 more a year for petrol or more than £400 extra for diesel compared with February.

But the bigger point is this: even if you don’t drive, you can still end up paying more.

Britain moves huge quantities of food, parcels, building materials and everyday goods by road. When diesel becomes more expensive, businesses face higher transport and distribution costs, and some of those costs eventually find their way into the prices the rest of us pay.

The price at the pump is only the first hit.

Fuel Prices Have Surged in 2026

The latest government weekly road fuel statistics show just how dramatically prices have changed since February.

On 23 February, petrol averaged 131.71p a litre and diesel 141.46p.

By 5 October, petrol had climbed to 174.88p, while diesel had reached 199.52p.

That means petrol has risen by around 33% in just over seven months, while diesel is up around 41%.

In cash terms, that’s an increase of more than 43p a litre for petrol and more than 58p for diesel.

The government’s weekly measure leaves diesel fractionally below £2, while the RAC’s daily measure has already recorded the average diesel price crossing the £2 mark.

Diesel drivers have been hit particularly hard. In February, diesel cost around 10p more than petrol. That gap is now approaching 25p a litre.

What Does That Mean for Your Wallet?

Percentages matter, but households feel price rises in pounds and pence.

Take a typical 55-litre tank.

At February’s prices, filling it cost roughly £72 with petrol or £78 with diesel.

At today’s prices, you’re looking at about £96 for petrol and almost £110 for diesel.

That’s around £24 more every time you fill a petrol car and nearly £32 more for diesel.

Using 7,000 miles a year as an illustration, and assuming a vehicle achieves around 45 miles per gallon, today’s prices would mean approximately £305 more a year for petrol or £411 more for diesel compared with February if current prices persisted.

At 10,000 miles a year, the increase rises to around £436 for petrol and almost £590 for diesel.

These aren’t forecasts. Fuel prices will move, cars have different fuel efficiency and people drive different distances.

But they show the scale of the squeeze.

For many households, driving isn’t optional. People still need to get to work, take children to school and go about everyday life.

That additional money has to come from somewhere else in the household budget.

Google Maps May Help, But It Doesn’t Fix the Rise

Andy Burnham highlighted today that motorists can now see near real-time petrol and diesel prices on Google Maps, using data from the government’s Fuel Finder scheme.

The government estimates that shopping around using price comparisons could save a car-owning household around £40 a year on average.

That’s useful. Motorists should obviously be able to find the cheapest local filling station.

But look at the scale.

Our illustrative 7,000-mile diesel driver faces around £411 a year more at today’s prices than at February’s prices if those prices persisted.

The government’s estimated £40 saving would offset roughly one-tenth of that increase.

Price comparison can help motorists minimise the damage.

Google Maps might help you find the cheapest £2 diesel. It doesn’t make £2 diesel cheap.

Britain Runs on Road Transport

Britain remains enormously dependent on its roads.

Department for Transport figures show motor vehicles travelled 342.6 billion miles on Great Britain’s roads in 2025, equivalent to roughly 6.6 billion vehicle miles every week.

Vans accounted for 58.8 billion miles, while heavy goods vehicles covered another 16.3 billion.

Together, vans and lorries travelled more than 75 billion miles during the year.

Some households can reduce discretionary journeys when fuel becomes expensive.

Businesses often have far less choice.

Supermarkets still need deliveries. Shops need stock. Builders need materials. Parcels still have to reach homes and businesses.

And when you look at the amount of fuel involved, relatively small price changes quickly become large business costs.

The Road Haulage Association uses an example of a 44-tonne articulated lorry travelling around 75,000 miles a year and achieving roughly 8.3mpg.

That equates to approximately 41,000 litres of diesel annually.

So every 10p increase in diesel represents roughly £4,100 a year on that volume of fuel, before accounting for recoverable VAT.

Commercial operators often buy fuel below retail forecourt prices, so this is an illustration of the scale rather than an estimate of the actual cost faced by every haulier.

But multiply rising fuel costs across fleets of 20, 50 or 100 vehicles and the numbers become substantial very quickly.

Why You Pay Even If You Don’t Drive

This is the part of the fuel story that’s easily missed.

You may not own a diesel car. You may barely drive at all.

But almost everything you buy has had to move through the economy.

Raw materials are transported to factories. Finished goods move to warehouses and distribution centres. Supermarkets need deliveries. Online orders arrive by van. Construction materials need to reach building sites.

When fuel becomes more expensive, businesses broadly have three choices: absorb the increase through lower profits, find savings elsewhere, or pass some of the cost on to customers.

That doesn’t mean a 40% rise in diesel produces a 40% rise in food prices. Transport is only one part of the final price.

But sustained increases in fuel costs put upward pressure on supply chains.

Motorists feel the first hit at the pump. The rest of us can feel the second hit through the goods and services we buy.

That’s why £2 diesel isn’t simply a motoring story.

It’s a cost-of-living story.

Petrol and Diesel Duty Raises Around £24 Billion a Year

Then there is taxation.

HMRC figures show petrol duty raised approximately £9.7 billion in 2025/26, while diesel duty generated another £14.3 billion.

Combined, that’s around £24 billion a year from petrol and diesel duty alone.

Motorists currently pay 52.95p in fuel duty on every litre of petrol or diesel.

Fuel duty is fixed per litre, so higher pump prices do not automatically increase the amount collected on each litre.

VAT is different.

At February’s diesel price of 141.46p, the VAT contained in a litre was approximately 23.6p.

At 199.52p, it’s around 33.3p.

So a private motorist is now paying almost 10p more VAT on every litre of diesel than they were in February.

At roughly £2 a litre, around 53p is fuel duty and another 33p is VAT.

That means approximately 86p of every £2 spent on diesel is tax for an ordinary motorist.

VAT-registered businesses can reclaim qualifying VAT on business fuel, so it would be misleading to treat all the additional VAT charged as a straightforward Treasury windfall.

Private motorists can’t reclaim it.

For them, higher prices mean paying more VAT every time they fill up.

Why Prices Have Risen, And Why It Matters for Inflation

The immediate causes are largely international.

Disruption affecting oil production, refining and energy supplies has pushed prices higher. Diesel is particularly sensitive because of its importance to freight, agriculture and industry.

Britain cannot control global energy markets.

But higher petrol and diesel prices feed directly into the inflation figures, while higher transport and distribution costs can also put pressure on the prices of other goods and services.

That distinction matters for policymakers.

An international energy supply shock is not the same thing as inflation caused by excessive domestic spending.

Higher interest rates cannot produce more diesel, increase refinery capacity or repair disrupted supply chains.

Governments cannot control global oil markets, but they do control domestic fuel taxation and can make decisions about energy security and resilience.

The Bottom Line

Diesel is around £2 a litre.

Petrol has risen by roughly 33% since February, while diesel is up around 41%.

For someone driving around 7,000 miles a year, maintaining today’s prices could mean around £300 more a year for petrol or more than £400 extra for diesel compared with February.

Google Maps may help motorists shop around, with the government estimating average savings of around £40 a year.

Useful, yes.

But it doesn’t come close to reversing the scale of the underlying increase.

And motorists aren’t the only people affected.

Britain’s vans and lorries travel more than 75 billion miles a year, moving the food, parcels, materials and goods on which the economy depends.

HMRC figures show petrol and diesel duty raised around £24 billion in 2025/26, while private motorists are also paying almost 10p more VAT per litre of diesel than in February.

So this is bigger than the number displayed outside your local filling station.

Higher fuel prices hit drivers directly. They increase the cost of moving goods around Britain. They put pressure on businesses and can ultimately feed through into the prices paid by households that may not drive at all.

You don’t have to drive a diesel car to pay the price of expensive diesel.

The price at the pump is only the beginning.

✍️ Jamie Jenkins
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When the Rich Leave, What Happens to Britain’s Tax Take?

Jamie Jenkins — Tue, 06 Oct 2026 20:39:27 GMT

An analysis of the Bloomberg Billionaires Index has found that super-rich UK residents with combined wealth of around £121 billion have either left Britain or loosened their UK ties since 2024.

That does not mean £121 billion has physically disappeared from Britain.

Some of those individuals will still own businesses, investments and property here. Some will continue to pay UK tax.

But it raises an important question.

What happens when some of the people paying the largest tax bills decide Britain is no longer the best place to live?

The Top 1% Pay More Than a Quarter of Income Tax

Britain’s Income Tax system is heavily reliant on a relatively small number of people.

HMRC projects that in 2026/27 the top 1% of Income Tax payers will receive 12.8% of total income but account for 26.6% of all Income Tax liabilities.

That’s more than £1 in every £4 of Income Tax coming from the top 1%.

And the figures for Britain’s former non-dom population tell a similar story.

HMRC estimates that at least 81,900 non-dom and deemed-dom taxpayers generated £13.6 billion in tax and National Insurance liabilities in 2024/25.

Their numbers actually fell by around 1%, from 83,100 to 81,900, yet their combined liabilities increased by 9%.

This isn’t an argument that wealthy people shouldn’t pay more tax. Britain deliberately has a progressive tax system.

But it does explain why their behaviour matters.

When a relatively small group contributes billions of pounds, losing some of them can matter to the public finances.

Britain Changed the Rules

The old non-dom system allowed qualifying UK residents to receive favourable tax treatment on foreign income and gains.

The previous Conservative government announced in March 2024 that the old system would be abolished from April 2025 and replaced with a residence-based regime.

Labour proceeded with the reform after taking office, while changing parts of the package, including the treatment of trusts and inheritance tax. The new system took effect from 6 April 2025.

The principle behind it is straightforward.

If someone makes Britain their long-term home, the Government believes they should eventually pay UK tax on their worldwide income and gains rather than continue indefinitely under the old non-dom arrangements.

The purpose was therefore not to make wealthy people leave.

It was to collect more tax from them.

But there was always a catch.

Some were expected to leave.

The OBR Expected Some Rich People to Leave

When the Office for Budget Responsibility assessed the reforms, it did not assume every affected taxpayer would simply stay in Britain and pay more.

It expected some to leave.

Among non-doms who would lose the old tax treatment, the OBR assumed around 12% of those without trusts and 25% of those with trusts would leave the UK.

Those estimates were higher than under the original Conservative plans because Labour’s revised package increased some tax liabilities, particularly through inheritance tax and other capital-tax changes.

So the Government’s own fiscal watchdog was already expecting a sizeable behavioural response.

The question now is whether even more people leave than the forecasts allowed for.

So why introduce a policy if you expect some taxpayers to leave?

Because the calculation is that the extra tax collected from those who stay will outweigh the tax lost from those who go.

Imagine 100 people each pay £1 in tax.

You change the rules so they now pay £2.

If 20 leave, the remaining 80 still pay £160 instead of the £100 you collected before.

You’ve lost taxpayers, but you’ve raised more money.

The problem comes if too many leave.

That’s the gamble.

Why Does This Matter to Everyone Else?

One recent example shows how much can be involved.

Hedge-fund billionaire Chris Rokos was estimated to have paid around £330 million in UK tax in the latest tax year, making him Britain’s third-largest individual taxpayer on the Sunday Times Tax List.

He has since moved to Greece.

That does not mean the Treasury automatically loses £330 million every year. The figure itself is an estimate rather than an HMRC-published personal tax bill, and Rokos may continue to have UK tax liabilities.

But it shows why the decisions of a very small number of people can matter.

Britain is also competing with other countries for these internationally mobile residents.

Greece, Italy and Portugal have introduced preferential regimes intended to attract wealthy foreign residents, while Monaco, Switzerland and the UAE remain obvious alternatives.

And there is another effect that is much harder to count.

It isn’t only about people already living here deciding to leave.

Tax competitiveness can also influence whether wealthy entrepreneurs and investors choose Britain in the first place.

If somebody who might once have chosen London instead chooses Athens, Milan or Dubai, there is no departure for the statistics to record.

But Britain may still miss out on their tax contribution, investment, spending and business activity.

So Is the Policy Working?

Right now, the answer is:

We don’t know.

The £121 billion figure is striking, but it is a media analysis of the wealth of a selected group of billionaires.

It is not £121 billion of tax revenue.

And it is not proof that the policy has failed.

Some departures were explicitly built into the Government’s fiscal forecasts.

The real test is much simpler.

HMRC tells us that non-dom and deemed-dom taxpayers generated £13.6 billion in tax and National Insurance liabilities in the final year before the new regime.

The OBR expected a meaningful proportion of affected taxpayers to leave.

So what matters now is whether the additional tax collected from those who remain outweighs the tax lost from those who go.

That will take time to establish properly.

The Bottom Line

Britain should expect wealthy residents to contribute significantly to the country in which they live.

The figures show that they already do.

But governments also have to recognise that some of the people paying the largest tax bills have the greatest ability to move internationally.

An analysis of Bloomberg’s billionaire data suggests UK residents with combined wealth of around £121 billion have either left Britain or loosened their ties since 2024.

That doesn’t prove the tax reforms have failed.

But it makes one question increasingly important:

Did the Government correctly calculate how many wealthy taxpayers would be prepared to leave?

Because ultimately, this isn’t about how many billionaires Britain has.

It’s about how much tax Britain actually collects.

✍️ Jamie Jenkins
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One-In, One-Out Is Dead — Around £84m for Virtually No Net Reduction

Jamie Jenkins — Thu, 01 Oct 2026 21:44:52 GMT

I joined Mike Graham again this week, and we started with a policy we were talking about on the show more than a year ago.

One-in, one-out is dead.

We also got into Andy Burnham’s spending plans, the state of the jobs market and the extraordinary row in the Senedd over whether politicians should use the word “blanket”.

Watch my full interview with Mike below.

£84 Million for Virtually No Net Reduction

The principle behind one-in, one-out sounded straightforward.

Someone arriving across the Channel could be returned to France. In exchange, Britain would take an asylum seeker from France through the legal route.

The problem with the numbers was obvious from the beginning. If you send roughly one person out and bring roughly one person in, you are not substantially reducing the number of people in Britain.

Home Secretary Shabana Mahmood told MPs in September that the numbers going in each direction had tracked “fairly evenly”. She also revealed that returning people to France was costing around £56,000 per person.

Around 1,500 people were ultimately returned.

So the implied calculation is straightforward:

1,500 × £56,000 = around £84 million.

That £84 million is an estimate based on the Home Secretary’s average cost per return, rather than a published final bill for the entire scheme.

But the value-for-money question remains.

We spent tens of millions returning people to France while taking broadly the same number back through the other side of the agreement. And all of this was happening on a tiny scale compared with the overall number of people crossing the Channel.

As I said to Mike, it was a drop in the ocean.

A year after the policy was being talked up as part of the answer to Channel crossings, it is gone.

Another Big Spending Promise

We then moved onto Andy Burnham’s proposed National Care Service.

The government says it wants to introduce free personal care for older people in the next Parliament, with changes to the state pension triple lock from April 2030 helping to fund it.

Social care undoubtedly needs reform.

But my point to Mike was about the bigger picture: where is the plan to get existing spending under control?

Britain borrowed £77.3 billion in the first five months of this financial year, £8.1 billion more than forecast. Over those same five months, central government spent £50 billion on debt interest alone.

Yet so much of our political debate still seems to revolve around finding the next thing government can spend money on.

Social care, health, welfare and defence all require funding. But eventually somebody has to confront the other side of the equation.

How much government can sustainably spend, and who pays for it?

Cardiff Bay and the Word “Blanket”

Then came perhaps the most bizarre part of the interview.

During a Senedd debate on Wales’s default 20mph speed limit, Janet Finch-Saunders used the word “blanket”.

She was pulled up on it and apologised.

Later, Russell George used the same word, was interrupted and corrected himself to “default”.

This really happened.

The Llywydd reminded Members that the Standards Commissioner and others had previously ruled that “blanket” was not appropriate when describing the policy. The earlier ruling described the term as imprecise and inaccurate.

There is a factual distinction here. The policy changed the default limit on restricted roads rather than making every road in Wales 20mph, and exceptions can be made.

But the spectacle of elected politicians being pulled up in the Welsh Parliament for saying the word “blanket” is, in my view, bonkers.

Wales has enormous challenges.

NHS waiting lists remain a serious problem. We have economic challenges and stretched public services. Yet this is the calibre of debate we are seeing in Cardiff Bay, from politicians whose wages we all pay.

For me, it is another example of why I remain deeply sceptical about calls for further devolution or Welsh independence.

Before demanding substantially more powers for Cardiff Bay, perhaps we should be asking how well the powers Wales already has are being used.

Giving an institution more power does not automatically mean better government.

216,000 Payroll Jobs Down, 130,000 Promised

We finished with perhaps the strongest numerical comparison of the interview.

The latest ONS figures estimate there were 30.2 million payrolled employees in August, down 145,000 compared with a year earlier.

The ONS says payrolled employment has generally been falling from its 2024 peak.

Using the underlying ONS series, there are now around:

216,000 fewer people on UK payrolls than in June 2024.

Then look at what Chancellor John Healey announced this week.

The government says it will use the National Wealth Fund’s existing capitalisation to create and support 130,000 jobs across the UK by 2030.

Put those figures next to each other.

216,000 payroll jobs down since June 2024.

130,000 jobs promised by 2030.

Even if all 130,000 are additional jobs, that is equivalent to only around 60% of the payroll employment decline we have already seen.

That was my point to Mike.

Labour increased employer National Insurance, increasing the cost of employing people. I have consistently called it a jobs tax.

Of course, you cannot attribute every lost payroll job to one tax change. Employment is affected by growth, wages, business confidence and plenty of other factors.

But my argument has always been that making it more expensive to employ people when the jobs market is already weakening is hardly going to help.

So we have increased the cost of employment, payroll numbers have fallen, and government is now using public policy and the National Wealth Fund to create or support 130,000 jobs by 2030.

That would fix only just over half of the payroll decline we have already seen.

And they have until 2030 to do it.

The Same Question Keeps Appearing

Immigration. Social care. Devolution. Jobs.

They look like separate stories, but the same question keeps appearing:

What are the actual outcomes?

One-in, one-out operated at tiny scale and came with an implied return cost of around £84 million.

Government continues to unveil new spending commitments while borrowing remains above forecast and debt interest swallows tens of billions.

Payroll employment has fallen by around 216,000 since June 2024, while the government promises to create or support 130,000 jobs by 2030.

And in Wales, politicians are being pulled up in the Senedd for saying the word “blanket”.

You can agree or disagree with the arguments I made to Mike.

But this is why I keep coming back to the numbers.

Political announcements are easy.

Outcomes are what matter.

✍️ Jamie Jenkins
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Burnham Says Brexit Has Hurt Britain. Yet UK Growth Has Beaten Germany, France and Italy

Jamie Jenkins — Wed, 30 Sep 2026 06:02:17 GMT

“Brexit has done more harm than good.”

That was Andy Burnham’s verdict at Labour Party conference. He argued that Britain had lost some control over its economy since leaving the EU, pointed to a decade of weak growth and promised to set out options for a new long-term relationship with Europe.

Burnham also announced changes to the state pension triple lock from 2030 and promised a National Care Service that would be “fully funded, and not through borrowing.”

Three big claims. So what do the numbers tell us?

How Has Britain Actually Grown Since the Referendum?

There is no perfect way of measuring the economic impact of Brexit. We know what happened after the referendum, but we can never observe the alternative history in which exactly the same UK economy remained inside the European Union.

What we can do is compare Britain’s actual economic performance with other large European economies.

Using real GDP, which strips out changes caused by inflation, and comparing Q2 2016, the quarter of the referendum, with Q2 2026, the UK economy has grown by 13.2%.

Spain has clearly outperformed Britain, growing by 21.5%. But UK real GDP growth has also exceeded France at 12.8%, Italy at 10.7% and Germany at 7.8%.

That does not tell us exactly what would have happened had Britain voted Remain, because there is no alternative UK economy for us to observe.

But the actual international comparison does tell us something important. Britain’s weak growth over the past decade has not been unique among Europe’s major economies.

Germany and Italy remained inside the EU and have grown more slowly, while France has grown at almost exactly the same rate.

So when Burnham links Britain’s decade of weak growth to Brexit, the story is more complicated. Brexit alone cannot explain Britain’s growth problem when several comparable EU economies have performed no better, or worse.

The Triple Lock Does Need Reform. But What Happens to the Savings?

Burnham’s second major announcement was reform of the state pension triple lock from April 2030.

Currently, the state pension rises each year by whichever is highest: average earnings growth, inflation or 2.5%.

The problem is fairly simple. If pensions rise faster than wages in one year, that higher pension level can become permanently baked in. Future increases then start from that higher base, which can push pension spending progressively higher relative to earnings.

Burnham’s proposal would still guarantee increases of at least inflation or 2.5%, while adding a longer-term link to earnings. The Institute for Fiscal Studies says this removes the most problematic part of the existing triple lock and puts state pensions on a more sustainable path.

The government estimates the change would reduce state pension spending by around £15bn a year by the end of the 2030s, rising further over subsequent decades.

So there is a reasonable fiscal case for reform.

But Burnham doesn’t intend simply to bank those savings. He wants them to help pay for his National Care Service.

And that raises a much bigger question about Britain’s public finances.

What Does “Fully Funded” Actually Mean?

Burnham promised that the National Care Service would be “fully funded, and not through borrowing.” The government says the service will be expanded gradually as savings from the pension changes increase.

Technically, there is nothing contradictory about calling an individual policy fully funded. A government can identify permanent savings or additional revenue and use them to finance new expenditure.

But Britain isn’t starting from a balanced budget.

The latest ONS figures estimate that the public sector borrowed £134.3bn in the financial year ending March 2026.

That changes how we should think about any saving.

Suppose government eventually finds £18bn of permanent savings. It could spend that £18bn on new services, or it could borrow £18bn less than it otherwise would.

If it chooses to spend the money, the new programme can legitimately be described as funded. But the £18bn hasn’t suddenly become free money.

Every pound of savings spent on a new commitment is also a pound that cannot be used to reduce the deficit.

Ultimately, government has choices. It can raise taxes, reduce spending elsewhere, including potentially parts of the welfare budget, borrow more, or limit the generosity of new commitments.

There is no option where additional spending has no trade-off.

A National Care Service, But Not the Whole Care-Home Bill

This is perhaps the most important detail in the announcement.

Burnham compared his new National Care Service with the creation of the NHS and said it would provide peace of mind for people worried about their care needs, homes and savings.

But the government’s own announcement makes clear that what is being offered is free personal care for older people, based on need rather than ability to pay. That includes help with things such as eating, bathing and using the toilet.

It does not mean the entire cost of living in a residential care home becomes free.

The government explicitly states that the National Care Service “will not cover bed and board”. Existing means-tested council support will continue for those accommodation and living costs.

That is a major distinction.

If somebody is admitted to an NHS hospital, they don’t receive the doctor and nurse for free but then get a separate bill for the hospital bed and their meals.

Under the proposed National Care Service, residential accommodation and living costs will remain outside the universal offer.

So despite the NHS comparison, this is not a system in which the state picks up the entire residential-care bill. It is a commitment to provide the personal-care element free, while potentially very substantial accommodation and living costs remain.

That matters both for families judging what the policy actually offers and for anyone assessing claims about how much a National Care Service will cost.

The Numbers Behind Burnham’s Speech

There are significant ideas in Burnham’s conference speech. Reforming the triple lock addresses a genuine weakness in the existing system, and Britain’s social care system clearly needs a sustainable long-term settlement.

But the numbers provide important context.

Burnham says Brexit has done more harm than good. Yet since the referendum, UK real GDP has grown 13.2%, ahead of France, Italy and Germany, although Spain has performed considerably better.

He says the National Care Service will be fully funded, but Britain is already borrowing more than £130bn a year. Savings used to finance new spending cannot simultaneously be used to reduce that deficit.

And while the policy is being compared with the NHS, the government has now confirmed that bed and board in residential care will not be free.

That leaves us with the questions that matter.

What will the National Care Service ultimately cost? How much of the triple-lock saving will pay for it? What will families still have to pay themselves? And if Britain continues to run large deficits, what spending will government prioritise, and what will it cut?

Burnham’s speech sets out the ambition.

The numbers reveal the trade-offs.

✍️ Jamie Jenkins
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Welsh Independence: The £22.8 Billion Question

Jamie Jenkins — Sun, 27 Sep 2026 10:05:16 GMT

Welsh independence has suddenly become much more than a campaign on the fringes of Welsh politics.

For the first time, Wales has a First Minister from a party committed to independence. On Saturday, Rhun ap Iorwerth told thousands of supporters at a march in Aberystwyth that Wales was on a constitutional journey with “no turning back”. Around 8,000 people were estimated to have attended.

So put the flags and speeches to one side for a moment. What do the numbers actually tell us?

Four immediately stand out:

32% Yes
68% No
46% say economic fears are the biggest barrier
£22.8 billion current Welsh fiscal deficit

That last number helps explain why the third matters so much.

What Does Wales Actually Think?

The latest Survation poll was commissioned by YesCymru, which is worth making clear upfront. Among likely voters, after undecided and refused responses were removed, 32% said they would vote Yes to independence and 68% said No.

YesCymru also highlighted a separate question where 54% placed themselves at five or above on a zero-to-ten independence scale. But 20% chose exactly five, the midpoint, while only 34% chose six to ten. That is rather different from saying 54% would vote for independence.

For me, the more interesting finding is what people said was holding independence back. Some 46% identified economic fears as the biggest barrier, compared with just 5% who chose British identity and 5% who cited public opposition or a lack of desire for independence.

So let’s look at the economics.

The £22.8 Billion Question

The latest Office for National Statistics figures cover the 2024/25 financial year and estimate public-sector revenues, expenditure and the resulting fiscal balance across the countries and regions of the UK.

For Wales, the net fiscal balance was a deficit of £22.781 billion.

That’s around £22.8 billion in a single year, equivalent to £7,149 for every person in Wales.

These figures aren’t simply comparing Welsh Government spending with the relatively small number of taxes devolved to Cardiff Bay. The ONS exercise allocates public revenues, including centrally collected taxes, and public expenditure across each country and region.

In simple terms, considerably more public spending is currently attributed to Wales than revenue.

That is a pretty important starting point.

Would Independence Inherit That £22.8 Billion?

Not exactly. The £22.8 billion describes Wales’s fiscal position within the United Kingdom today, rather than being an ONS forecast of what the finances of an independent Wales would look like.

Taxes could change, spending could change and economic performance could change. There would also need to be negotiations around pensions, defence, currency, debt and how spending currently undertaken at UK level was treated.

But the current fiscal position still matters. The Independent Commission on the Constitutional Future of Wales concluded there would be a significant fiscal challenge, with the inherited deficit requiring hard choices in the short to medium term. It also pointed to Wales’s low-wage, low-productivity economy as an important reason for relatively low tax revenues.

So the key question is what policies would substantially close that gap between revenue and spending.

Then There Is The Debt, And The Jobs

The annual fiscal position is only part of the picture.

UK public sector net debt stood at £2.986 trillion at the end of August 2026. An independence settlement would therefore have to address what, if any, share of UK sovereign debt was allocated to Wales, alongside the division of assets and decisions around pensions and currency.

There is no agreed formula for doing that. But just to illustrate the scale, dividing today’s debt broadly according to Wales’s share of the UK population would produce a figure of around £137 billion. That isn’t a prediction of what Wales would actually inherit, and assets would have to be considered too, but it shows the size of the numbers that could be involved.

Then there are the jobs.

Wales currently has around 35,000 UK civil servants, more than its population share would suggest. The DVLA employs more than 6,000 people at its Swansea headquarters, the Office for National Statistics has around 3,000 staff in Newport, while Companies House is headquartered in Cardiff.

An independent Wales would obviously need people to take on functions currently carried out by the UK Government. Tax collection, benefits administration, borders, regulation and foreign affairs don’t disappear because the constitutional arrangements change.

But there is another side to that equation. The Welsh constitutional commission said it was likely that Westminster would relocate UK-wide functions currently based in Wales, and concluded that jobs created to manage the functions of a new Welsh state could be balanced by the loss of existing UK Government jobs.

It also highlighted the cost of setting up new institutions. Social Security Scotland, for example, saw projected implementation costs rise from £308 million to £658 million as Scotland built its own capacity to administer devolved benefits.

So independence could create different jobs and institutions in Wales, but it would also mean replacing services currently provided across the UK and potentially losing UK-wide jobs already located here.

Leave the UK, Then Rejoin the EU?

There is another part of Plaid Cymru’s position that deserves scrutiny.

Plaid wants Wales to become independent from the United Kingdom. Its constitution describes its aim as securing “independence for Wales in Europe”, while its current policy says Wales’s interests are best served by returning to full membership of the European Union.

The UK and EU are clearly very different arrangements. The European Union doesn’t operate anything approaching the UK’s shared Treasury, welfare system or level of fiscal transfers.

But it still raises questions that would have to be answered. If the argument is that more decisions affecting Wales should be made in Wales rather than Westminster, which powers would subsequently be exercised jointly through European institutions?

There is also the practical question of Wales’s relationship with the rest of the UK. Independence followed by an application for EU membership would bring questions around trade, regulation, borders and currency into the negotiations.

Those aren’t constitutional footnotes. They could have significant economic consequences.

The Bottom Line

Plaid Cymru now has something the Welsh independence movement has never had before: a Welsh Government led by a party unequivocally committed to independence.

That gives it a much bigger platform from which to make its case. But YesCymru’s own polling currently has 32% saying Yes and 68% saying No, with economic fears comfortably the biggest barrier.

The marches and speeches will continue.

The numbers tell us the questions that still need answering.

✍️ Jamie Jenkins
Stats Jamie | Stats, Facts & Opinions

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Who Decides What Is “Disinformation”?

Jamie Jenkins — Sat, 26 Sep 2026 07:03:00 GMT

I joined Russell Quirk, standing in for Mike Graham on this week, for our usual look at some of the numbers and stories behind the headlines.

We covered the debate around disinformation, the Liberal Democrats, immigration and asylum, before inevitably ending up back on Britain’s public finances.

But one question stood out.

Who decides what is “disinformation”?

Who Gets to Decide What Is True?

During the interview, I went back to some of the claims made publicly during Covid.

I gave several examples where figures quoted by politicians, broadcasters or experts were very different from the underlying data, including claims about hospital patients, vaccination status and the modelling around Omicron.

That doesn’t mean every incorrect claim is deliberate misinformation.

But it does highlight a much bigger problem.

Governments can get things wrong. Broadcasters can get things wrong. Experts can get things wrong. And people on social media can get things wrong too.

So who becomes the arbiter of truth?

For me, the answer should always come back to transparency.

Show the evidence. Publish the data. Let people challenge it.

That is far healthier than expecting any government, broadcaster or institution to decide which arguments the public should be allowed to hear.

The Lib Dems, Immigration and Asylum

We also discussed the Liberal Democrats following their conference, including their plans on income tax and their desire for a closer relationship with the European Union.

I said during the interview that I actually support the principle of raising income tax thresholds. The question is how policies such as that are ultimately funded, particularly when Britain is already struggling to balance the books.

The conversation then moved onto immigration and asylum.

My argument was straightforward: Britain needs to know who is entering the country, establish people’s identities and have an effective system for dealing with those who ultimately have no legal right to remain.

That should not be a controversial requirement of a functioning immigration system.

And Finally, Britain’s Finances

We inevitably finished with government borrowing.

I covered the latest public-finance figures in detail in Stat of the Nation earlier this week, so there is little value in repeating all the numbers here.

But the point I made on the programme was simple.

Government income is rising, but spending remains extremely high, the benefits bill continues to increase and debt interest alone has already cost around £50 billion in the first five months of the financial year.

Britain cannot solve its fiscal problems simply by continually looking for more tax revenue.

What government spends matters just as much as what it raises.

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Taxes Are Rising. Spending Is Rising Faster.

Jamie Jenkins — Wed, 23 Sep 2026 06:02:32 GMT

Britain borrowed £18.3 billion in August, £2.9 billion more than a year earlier and £3.5 billion above the OBR forecast. In cash terms, it was the second-highest August borrowing on record, behind only August 2020 during the pandemic.

But the monthly borrowing number only tells part of the story. The government is collecting substantially more money than it was a year ago, while expenditure has increased even faster and is now running materially ahead of the official forecast.

The Government Is Collecting More

During the first five months of this financial year, central government current receipts reached £460.7 billion, up £23.6 billion on the same period last year.

Most of that additional revenue came from taxes and National Insurance:

Taxes: £347.1bn, up £19.8bn
National Insurance contributions: £82.9bn, up £3.0bn
Other government income: £30.8bn, up £0.9bn

Put taxes and National Insurance together and the government collected around £22.8 billion more from those sources in just five months. Income-related taxes were up £8.1 billion, Corporation Tax increased by £4.2 billion and VAT brought in another £3.8 billion.

The ONS technically records National Insurance as a compulsory social contribution rather than a tax, but for households and businesses it remains a compulsory payment linked to employment. For the public finances, the important point is that government revenues are not falling short of expectations.

In fact, central government receipts are currently £1.1 billion higher than the OBR forecast.

Spending Is £7.4 Billion Above Forecast

Now look at the other side of the ledger.

Central government expenditure reached £546.3 billion between April and August, compared with £520.8 billion during the same five months last year. That means spending has increased by £25.6 billion in just five months, or 4.9%.

The comparison with the OBR forecast is even more revealing. By this point in the year, the OBR expected central government expenditure of £539.0 billion.

Actual expenditure is £546.3 billion.

That leaves spending £7.4 billion above forecast after only five months. At the same time, receipts have come in £1.1 billion above forecast.

So the clearest comparison in the entire release is:

Receipts: £1.1bn ABOVE forecast
Spending: £7.4bn ABOVE forecast

The OBR was already forecasting public spending to remain historically high, with total spending expected to be around 45% of GDP in the near term and still above its pre-pandemic share at the end of the forecast.

Yet the latest outturn shows expenditure running ahead of even that planned path.

Where Is the Extra Money Going?

The £25.6 billion increase in spending compared with the same period last year is spread across several major areas.

Social benefits: £145.0bn, up £9.7bn
Goods and services: £196.2bn, up £7.1bn
Net investment: £41.1bn, up £4.2bn
Transfers to local government: £69.1bn, up £2.0bn
Debt interest: £50.0bn, up £0.7bn

The largest increase among these major categories is social benefits, which have risen by £9.7 billion in only five months. Benefits spending is also £2.4 billion above the OBR forecast for this stage of the financial year.

Government spending on goods and services has risen by another £7.1 billion. This category includes departmental pay and the everyday costs of delivering public services, both of which the ONS notes are affected by inflation.

Net investment is also £4.2 billion higher, while transfers to local government have increased by £2.0 billion. The picture is therefore not one isolated spending line running high, but increases across several large parts of the government budget.

£50 Billion Already Spent on Debt Interest

Then there is the cost of servicing Britain’s existing debt.

Central government debt interest reached £8.8 billion in August alone, the highest August figure since monthly records began in 1997, in cash terms. Of that, £2.1 billion reflected the inflation-linked uplift on index-linked government debt.

Across the first five months of this financial year, debt interest has already cost £50 billion. That is slightly higher than last year, but more importantly it is £2.0 billion above the OBR forecast for this point in the year.

These costs matter because debt interest absorbs revenue before government makes choices about public services, investment or taxes. With the national debt still close to £3 trillion, even relatively small changes in inflation and interest costs can translate into billions of pounds.

Borrowing Is Lower Than Last Year, But Well Above Forecast

There is an important qualification in these figures.

Between April and August, Britain borrowed £77.3 billion, which is actually £2.2 billion less than during the same period last year. So borrowing has improved year-on-year.

The problem is the scale of that improvement compared with what had been expected.

The OBR forecast borrowing of £69.2 billion by this point. Instead, borrowing has reached £77.3 billion, leaving the public finances £8.1 billion above forecast after just five months.

Central government borrowing accounts for most of that miss, coming in £6.3 billion above forecast. Public corporations were £2.2 billion worse than forecast, partly offset by local government borrowing being around £0.3 billion better than expected.

There was also a significant revision to the previous figures. The ONS increased its estimate of borrowing between April and July by £2.3 billion, from £56.7 billion to £59.0 billion, largely because earlier tax receipts were revised down.

So this is not simply one unusually poor August number. The previous four months have collectively been revised higher as well.

Nearly £3 Trillion of Debt

Public sector net debt stood at £2.986 trillion at the end of August, £78.5 billion higher than a year earlier.

There is better news when measured against the size of the economy. Debt fell from 95.1% to 93.8% of GDP, because nominal GDP increased faster than the cash value of the debt.

That distinction matters. Britain’s debt ratio has improved over the past year, even while the actual amount owed has continued to rise.

But with debt still just short of £3 trillion and £50 billion already spent on interest in five months, the fiscal room available to government remains heavily constrained.

The Pressure Is on Spending

The £18.3 billion borrowed in August will grab the headlines, but it is not the most important number in this release.

The clearer picture is underneath it:

Receipts are £1.1 billion above forecast.
Spending is £7.4 billion above forecast.
Borrowing is £8.1 billion above forecast.

Government revenues are coming in slightly better than expected. Taxes and National Insurance are also generating substantially more than they did a year ago.

Yet central government expenditure is £25.6 billion higher than last year and £7.4 billion above the OBR’s planned path after only five months.

That is the central message from these figures: the immediate pressure on the public finances is not a shortfall in receipts. It is spending running materially ahead of forecast.

✍️ Jamie Jenkins
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Prices Up. Jobs Down. Families Feeling the Squeeze

Jamie Jenkins — Sun, 20 Sep 2026 07:02:18 GMT

I joined Mike Graham this week to talk through the latest economic data, and there was plenty to get into: inflation back above 3%, sharply higher fuel prices, another fall in payroll employment and the growing squeeze on household budgets.

And sometimes a simple story tells you as much about the economy as the headline statistics.

Mike told me he had taken his son for lunch at a country pub near Bath. Two meals, water and a coffee came to £44.50.

He could afford it. But what about the family of four sitting behind him?

That became one of the themes of our conversation: after several years of rising prices, how much room do ordinary households actually have left to spend?

Watch the Full Conversation

Inflation Is Rising Again

The latest figures show inflation increased from 2.9% to 3.1% in August, with transport, particularly motor fuels, helping drive the increase.

Motor fuel prices were 23% higher than a year earlier.

There is an important point here that often gets misunderstood.

If inflation stays at 3%, prices have not stopped rising. They are still increasing by around 3% a year, on top of all the increases households have already absorbed.

That cumulative impact is what matters.

Inflation may be well below the levels reached during the worst of the cost-of-living crisis, but that does not mean prices have gone back down.

Higher Fuel Prices, Then Higher Interest Rates?

We also talked about the Bank of England and whether higher interest rates are really the answer to another bout of inflation driven by fuel and energy.

My concern is straightforward: putting UK interest rates up does not make global oil cheaper.

Higher rates can reduce demand elsewhere in the economy, but they also squeeze households through mortgages, borrowing costs and potentially rents.

That risks creating a double hit: higher fuel and energy costs, followed by higher borrowing costs in an attempt to tackle inflation partly being driven by those external pressures.

Seven Months of Job Losses

At the same time, the labour market is weakening.

The latest payroll figures showed another fall in August, leaving payroll employment 145,000 lower than a year earlier.

We have now seen seven consecutive months of year-on-year falls in payroll employment.

And some of the biggest losses have been in areas such as retail and hospitality, exactly the parts of the economy that feel it when households start cutting discretionary spending.

That brings us straight back to the pub.

When Families Stop Spending

£44.50 for two pub meals does not tell us everything about the British economy.

But it illustrates the pressure households are under.

When prices keep rising, people change their behaviour. They eat out less, postpone purchases, cut back on weekends away and look for cheaper alternatives.

Multiply those decisions across millions of households and businesses start feeling it.

Demand weakens. Recruitment slows. Hours get cut. Eventually, jobs can disappear.

That is why inflation and employment should not be viewed as completely separate stories.

The bigger question is becoming very simple: how much money do households actually have left after paying for the essentials?

And when fuel, food, housing and other everyday costs have all become more expensive, there is less left to spend elsewhere.

We covered all of this, plus public versus private-sector pay, energy policy and the outlook for interest rates, in my latest conversation with Mike Graham.

Watch the full discussion above.

✍️ Jamie Jenkins
Stats Jamie | Stats, Facts & Opinions

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Inflation Is Rising Again, But Higher Interest Rates Won’t Make Petrol Cheaper

Jamie Jenkins — Wed, 16 Sep 2026 17:03:01 GMT

UK inflation is rising again. The Consumer Prices Index increased from 2.9% in July to 3.1% in August, putting inflation further above the Bank of England’s 2% target.

But the headline number only tells part of the story. Look underneath it:

Headline CPI: 3.1%, up from 2.9%
Core CPI: 2.6%, unchanged
Services inflation: 3.4%, unchanged
Motor fuels: up 23.0% year on year

The Office for National Statistics says transport, particularly motor fuels, made the largest upward contribution to the increase in inflation.

There is little sign in the August figures of a broad acceleration in underlying inflation. Core inflation did not rise and services inflation did not rise, while fuel prices surged.

The immediate increase therefore looks much more like another energy shock than an economy overheating because British consumers are suddenly spending too much.

Petrol Is Driving Inflation Higher

Between July and August, average petrol prices rose by 9.1p per litre, reaching 161.3p. Diesel increased by 14.2p, reaching 181.8p, while motor fuel prices overall were 23% higher than a year earlier.

The problem is that those figures are already looking backwards.

Official weekly data show average petrol prices had risen again to 168.14p per litre by 14 September, while diesel had climbed to 190.72p. That is around another 7p on petrol and almost another 9p on diesel compared with the August averages.

If those prices persist, fuel could remain an important upward pressure on September’s inflation figures.

Headline inflation could therefore rise further without British households suddenly demanding more goods and services. That distinction matters, because the reason prices are rising determines what different economic policies can actually influence.

Petrol Doesn’t Just Affect Your Car

Higher oil prices do not stop affecting you when you leave the petrol station. Almost everything we buy has to be manufactured, transported or delivered, which means energy costs work their way throughout the economy.

Hauliers use diesel, supermarkets operate distribution networks, manufacturers consume energy and businesses pay to move raw materials and finished goods. When those costs rise, firms may initially absorb part of the increase through lower margins, but some will eventually be passed on.

The Bank of England itself separates this into direct, indirect and second-round effects.

The direct effect is immediate, petrol, diesel and other energy prices rise. The indirect effect comes as more expensive energy increases the cost of producing and transporting other goods and services.

The Bank’s own September intelligence from businesses is already seeing that process. It reports higher freight and fuel costs, higher energy-intensive input costs and firms passing on part of those increases, although weak demand and competition are restricting how much they can raise prices.

That is an important distinction.

If a product becomes more expensive because diesel, freight or manufacturing costs have risen, its price has still gone up. But that does not automatically mean consumers are demanding too much of it.

The cost of supplying it has increased.

So What Would Higher Interest Rates Actually Fix?

This is where the interest-rate debate becomes much clearer.

The Bank of England itself says that “monetary policy cannot influence energy prices.”

Increasing Bank Rate cannot produce more oil, increase refining capacity or directly knock 10p off the price of petrol.

What higher interest rates can do is weaken demand. Mortgages and other loans become more expensive, businesses face higher financing costs, investment becomes less attractive and households have less money available to spend elsewhere.

That mechanism has an obvious role when an economy is overheating because demand is running ahead of supply.

But where is that evidence in these inflation figures?

Core inflation is unchanged.

Services inflation is unchanged.

The biggest upward pressure came from motor fuels.

And the Bank’s own business contacts are hardly describing a consumer boom. Its September report says consumer spending growth remains moderate, demand is weak for many big-ticket purchases, employment intentions are broadly flat, recruitment difficulties are below normal and modest spare capacity remains in the economy.

That is very different from a straightforward story of excessive domestic demand pushing prices higher.

The Bank Is Worried About What Might Happen Next

The Bank’s argument is not really that higher interest rates can reverse the oil shock. Its concern is that the original shock might later spread into wages, inflation expectations and wider domestic price setting.

Those are the second-round effects.

And if that happens on a sufficiently large scale, an external shock can become persistent domestic inflation.

But there is an important fact here. In July, the Bank said there was “little evidence so far” of material second-round effects. Its analysis of detailed price movements also found that the current episode was not yet showing the unusually broad-based second-round inflation seen after the 2022 energy shock.

The September Agents report hardly screams wage-price spiral either. Pay settlements reported for 2026 are averaging around 3.6%, employment intentions remain broadly flat and the Bank says only around a quarter of firms with later pay settlements explicitly identify inflation or the cost of living as affecting those settlements.

There is obviously uncertainty about what happens next, and the Bank points out that some wage and pricing evidence emerges with a lag.

But that is precisely the distinction.

A rate increase would be aimed at preventing a future risk of second-round inflation, not at directly correcting the fuel-price shock that is driving much of the latest increase.

The Risk of a Double Squeeze

There is another problem with an energy shock.

It already makes households poorer.

Motorists spend more filling their cars, businesses spend more moving goods around and some of those costs eventually appear in other prices. Households therefore have less purchasing power available for everything else.

Higher interest rates then work by applying another squeeze, increasing borrowing costs and reducing spending and investment.

That means an external energy shock can already weaken demand before monetary policy does anything.

The Bank itself recognises that higher energy prices push inflation up while also reducing real incomes and weighing on demand.

So if rates are increased because petrol and other energy-related costs have pushed headline inflation higher, the original supply problem remains. Oil does not become cheaper because mortgage payments rise.

What changes is the amount of demand elsewhere in the economy.

Fuel Duty Works Directly on the Price

There is another policy lever that works very differently, fuel duty.

Petrol and diesel currently carry 52.95p per litre of fuel duty, following the extension of the temporary 5p reduction until 31 December 2026.

That tax is included directly in the pump price.

So unlike interest rates, changing fuel duty operates directly on one part of the price motorists actually pay.

There is obviously a cost to the Treasury if duty is reduced further, so this is not a free option. But the mechanism is at least clear, a change in fuel duty can directly influence the pump price, while changing Bank Rate cannot directly change the global price of oil.

That difference is worth keeping in mind when considering what is actually driving the inflation numbers.

More UK Oil Would Not Give Britain a Separate Oil Price

The same principle applies to domestic oil production.

Producing more oil in Britain would not give us a separate British oil price. Oil is traded internationally, so UK consumers would still be exposed to changes in the global market.

Additional British production would add to global supply only at the margin.

But domestic production has another economic consequence that is much simpler.

More production means more of the associated economic activity takes place here, more investment, more employment, more profits and more taxable income.

If oil prices rise sharply, countries producing oil capture part of the financial upside from those higher prices. Countries importing it primarily experience the higher cost.

More domestic production therefore would not insulate Britain from global oil prices, but it could mean that more of the economic and tax benefit generated by those prices remains within the UK.

Government could then decide how any additional revenue is used, including whether some is returned to motorists or households facing higher energy costs.

There is no need to pretend that would make Britain independent of global energy markets. It simply changes how much of the economic value associated with production is captured domestically.

Tomorrow’s Interest Rate Decision

Bank Rate currently stands at 3.75%. At the July meeting, six members of the Monetary Policy Committee voted to leave rates unchanged, while three wanted to increase them to 4%.

The next decision is due tomorrow (17 September).

The important question is what evidence has changed since July.

We now know headline inflation has risen to 3.1%, but we also know that core inflation remains at 2.6% and services inflation remains at 3.4%. We know motor fuels rose 23% over the year, and we know petrol and diesel prices have increased further since the August CPI measurement.

Meanwhile, the Bank’s latest business intelligence still reports weak demand in significant parts of the economy, modest spare capacity, broadly flat employment intentions and limited evidence so far of a major acceleration in wage pressures.

So if the Bank chooses to tighten policy, it would not be because August showed a sudden acceleration in core or services inflation.

It would be acting pre-emptively against the possibility that the energy shock generates larger second-round effects later.

That distinction deserves to be made very clearly.

The Bigger Picture

Inflation at 3.1% matters. It remains above the Bank of England’s 2% target, and higher prices reduce living standards.

But the headline number does not tell us, on its own, what is causing the inflation.

Britain is experiencing another energy shock. It hits motorists directly through petrol and diesel, then spreads through haulage, freight, manufacturing and other production costs.

Those prices can rise without consumers demanding more.

The Bank cannot control the global oil price, and its own evidence so far shows limited second-round effects alongside weak demand in important parts of the economy. What it can do is squeeze demand further in an attempt to prevent those second-round effects emerging later.

That is the real argument around tomorrow’s decision.

Because the question is not simply whether inflation is rising, it is why.

✍️ Jamie Jenkins
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Seven Months of Payroll Job Losses — While the State Keeps Growing

Jamie Jenkins — Wed, 16 Sep 2026 10:41:50 GMT

Britain has now recorded seven consecutive months of falling payroll employment.

Another 26,000 employees disappeared from payrolls in August, taking the total down to 30.2 million. The latest ONS figures also show payrolled employment is 145,000 lower than a year ago.

But perhaps the more striking comparison is with the month before the general election.

In June 2024, Britain had 30,443,310 payrolled employees.

By August 2026, that had fallen to 30,227,243.

That is 216,067 fewer payrolled employees, around 216,000.

Vacancies have also fallen to 702,000 and smaller businesses are cutting back recruitment.

Meanwhile, public sector employment is still rising.

Britain is losing payroll employees, businesses are advertising fewer jobs, and the state is still getting bigger.

Seven Months of Falling Payroll Employment

August remains an early estimate and will be revised as more payroll information arrives.

But this is no longer about one provisional month.

Payroll employment has now fallen for seven consecutive months, and the ONS says the number of payrolled employees has generally been falling over the past two years.

Crucially, the ONS currently says PAYE Real Time Information provides its most reliable measure of employees.

That is why these numbers deserve attention.

Businesses Aren’t Just Cutting Jobs, They’re Hiring Less

Perhaps an even more revealing indicator is vacancies.

There were an estimated 702,000 vacancies across the UK in June to August 2026.

Outside the pandemic, the last time Britain had 702,000 or fewer vacancies was back in 2014.

The weakness among smaller employers is particularly striking.

Vacancies at businesses employing between one and nine people are down 23.5% in a year.

And the ONS makes an important observation.

Feedback from its Vacancy Survey suggests smaller firms may not be recruiting because of increases in labour costs.

That is important because this is no longer just theoretical.

Businesses themselves are telling the ONS that rising labour costs may be affecting recruitment.

A Reminder: What Did Labour’s “Jobs Tax” Do?

From April 2025, Labour increased employer National Insurance from 13.8% to 15% and cut the salary threshold at which employers start paying it from £9,100 to £5,000.

The Employment Allowance was also increased, cushioning the impact for some smaller employers.

But for many businesses, employing people became more expensive.

I have called this the jobs tax before because it increases the cost of employing someone.

That does not mean every payroll job lost since then was caused by National Insurance.

But what makes these latest figures interesting is that the ONS is now reporting feedback from smaller businesses that higher labour costs may be stopping them recruiting.

Increase the cost of employment and it should hardly be surprising if some businesses respond by employing fewer people.

Meanwhile, Public Sector Employment Is Rising

Now look at what is happening inside the state.

Public sector employment reached 6.21 million in June 2026, up 33,000 in a year.

Central government employment reached a record 4.08 million. The Civil Service employed 557,000 people, 6,000 more than a year earlier.

There is an important qualification.

Some schools becoming academies are statistically reclassified from local government into central government. Academy conversions accounted for around 21,000 of the annual movement between the two.

But total public sector employment itself was still 33,000 higher than a year ago.

So we have a striking contrast.

Overall payroll employment is falling, while public sector employment is rising.

And there is a basic economic reality here.

You cannot have a growing public sector without an economy capable of paying for it.

Public services and public sector salaries ultimately have to be financed through taxation, or through borrowing that taxpayers ultimately have to service.

That requires businesses employing people, paying wages, making profits and generating tax revenues.

The state cannot sustainably keep growing if the economy supporting it becomes weaker.

Then Look at Pay

The contrast becomes sharper again when we look at earnings.

Public sector regular pay growth: 6.3%

Private sector regular pay growth: 2.9%

Public sector regular earnings are currently growing at more than twice the rate in the private sector.

There is an important caveat. The ONS says public sector pay growth is being affected by variations in the timing of pay awards this year.

But the gap remains striking.

Private sector wage growth has slowed while businesses are simultaneously facing higher employment taxes and rising labour costs.

Fixing the Foundations?

Labour came into government promising to “fix the foundations”.

Since June 2024, Britain has lost around 216,000 payrolled employees.

Payroll employment has now fallen for seven consecutive months.

Businesses are advertising fewer vacancies.

Smaller employers are telling the ONS that rising labour costs may be stopping them recruiting.

Meanwhile, public sector employment is rising and public sector pay is currently growing at more than twice the private sector rate.

Government can spend more and employ more people.

But ultimately, those commitments have to be financed.

The state cannot keep growing unless the economy that pays for it grows too.

Britain needs businesses hiring, investing, creating profits and expanding the tax base that supports public services.

Right now, the payroll numbers are moving in the opposite direction.

✍️ Jamie Jenkins
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Borrowing Costs Soar, Births Hit a 48-Year Low — And Wales Falls Further Behind

Jamie Jenkins — Sun, 13 Sep 2026 21:56:27 GMT

There was plenty to discuss in my latest weekly conversation with Mike Graham on .

Britain is borrowing at increasingly expensive rates. Births in England and Wales have fallen to their lowest level since 1977. And in Wales, the latest education figures raise yet more questions about what more than a quarter of a century of devolution has delivered.

Here’s our full conversation.

Britain’s Borrowing Costs Are Rising

The Government sold £4.25 billion of 30-year debt this week at a yield of around 5.8% — the highest yield on a syndicated gilt since the Debt Management Office was established in 1998.

There are global pressures pushing bond yields higher, so this is not simply a British problem. But the principle is straightforward: the more expensive it becomes for government to borrow, the more taxpayers ultimately spend servicing the debt.

When the national debt is already approaching £3 trillion, that matters.

Britain’s Baby Bust

Births in England and Wales have fallen to their lowest level since 1977, while the fertility rate has dropped to just 1.39 children per woman.

There are many reasons people are having fewer children, but housing and affordability are difficult to ignore.

Almost three in ten people aged 20 to 34 now live with their parents. House prices have become far less affordable relative to earnings, rents are expensive and family formation is increasingly being pushed later.

It is hardly surprising that people delay having children when getting a home of their own has become so difficult.

Housing, Immigration and Population

That brought us onto immigration and population growth.

More people means more demand for homes, roads, schools and public services. If the supply of that infrastructure does not keep pace with population growth, the pressure does not disappear — it shows up in prices, rents and stretched services.

We also discussed another striking demographic statistic: around 40% of births in England and Wales now involve at least one parent who was born outside the UK.

That is an important part of understanding how Britain’s population is changing — and the scale of the infrastructure challenge facing governments.

Wales Is Still Falling Behind

Finally, we returned to education in Wales.

Education has been devolved since 1999, giving Wales the freedom to make different choices from England on assessment, qualifications, accountability and the curriculum.

After more than 25 years, those policies can reasonably be judged on their results.

And the uncomfortable fact remains: Wales performs below England in the major international education assessments, and the gap has widened.

Devolution was supposed to allow Wales to do things differently.

The question is whether different has meant better.

The Bigger Picture

These are very different statistics, but they point towards some of the same underlying pressures.

Britain is borrowing at increasingly expensive rates. Younger generations are finding housing less affordable and having fewer children. Population growth continues to increase demand for homes and infrastructure. And in Wales, more than 25 years of devolved education have not delivered better outcomes than England.

None of these trends appeared overnight.

The question is whether politicians are prepared to confront the numbers — rather than simply manage the consequences.

✍️ Jamie Jenkins
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Britain’s Baby Bust — Housing, Immigration and the Vicious Circle

Jamie Jenkins — Thu, 10 Sep 2026 06:02:12 GMT

Britain is having fewer babies.

New figures from the Office for National Statistics show there were 585,396 births in England and Wales in 2025 — down 1.6% in a year and the lowest number since 1977. The fertility rate has fallen to just 1.39 children per woman, while in Wales it is even lower at 1.33.

People are also having children later. The average age of mothers is now 31.1, while fathers average 34.0.

But the birth-rate story is not just about changing attitudes towards parenthood. It is also about whether younger adults can afford to leave home, establish independent households and start families.

And that brings housing and immigration into the same story.

The Vicious Circle

The argument is fairly simple.

Britain does not build enough homes.
Population growth adds more housing demand.
Housing becomes harder and more expensive to secure.
More young adults remain with parents or spend heavily on rent.
Family formation is delayed and birth rates fall.
Britain ages and needs more working-age people.
Immigration becomes part of the answer.
More people then need more homes.

And the cycle begins again.

Not every link can be given a precise causal percentage, but the wider pattern is worth examining.

More Young Adults Are Living With Their Parents

Go back to 1996 and around 21% of 20-to-34-year-olds were living with their parents.

By 2025, that had risen to 28.7% — from roughly one in five young adults to nearly three in ten. Among men aged 20 to 34, the figure is even higher at 34.9%.

There are several reasons behind that change. People spend longer in education, relationships tend to happen later and some younger adults deliberately remain at home to save money.

But look at what has happened to housing affordability over almost exactly the same period.

Homes Have Become Far Less Affordable

In 1997, the average home in England and Wales cost around 3.6 times a full-time worker’s annual earnings.

By 2025, the median house-price-to-earnings ratio was 7.6 times earnings in England and 6.0 times earnings in Wales.

So across roughly one generation, buying a home has gone from costing around three to four years of earnings to six, seven or more.

Over that same period, the proportion of young adults living with their parents has risen substantially.

That does not mean house prices explain every young adult still living at home. But it does mean the economics of establishing your own household have become much tougher than they were for the generation before.

And for people unable to buy, the alternative is often expensive private renting. The choice for many younger adults increasingly becomes staying with parents for longer or spending a large share of their income on rent.

Neither makes starting a family easier.

Housing Appears to Matter for Births

There is evidence that these financial pressures affect decisions about having children.

The Resolution Foundation, an independent economic think tank, looked at the changing fertility patterns of younger generations earlier this year. Among childless 32-year-olds, 30% of women and 25% of men said financial reasons were stopping them from trying for children.

Its analysis also found an association between the increase in young adults living with their parents and rising childlessness among some groups of younger women.

That does not mean everybody living with Mum and Dad would otherwise be having children. But the broader point is difficult to dismiss: if people struggle to afford an independent household, establishing a family becomes harder too.

Britain Has Increased Its Population Without Building Enough Homes

Housing is ultimately a question of supply and demand.

For decades Britain has struggled to build enough homes, particularly in the places where people most want or need to live. At the same time, the population has continued to grow, with international migration making an increasingly important contribution to that growth.

That matters because additional population means additional demand for somewhere to live.

More people need more homes. If the population grows faster than the housing stock, demand increases faster than supply. That puts upward pressure on house prices and rents.

The issue is therefore not simply immigration on its own. It is what happens when sustained population growth is combined with a housing system that fails to expand quickly enough.

If Britain wants a larger population, whether through natural growth or migration, it needs to build the homes and infrastructure to accommodate it.

Otherwise housing becomes scarcer, more expensive and harder for younger adults to secure.

Then the Demographic Problem Comes Back Around

This is where the circle becomes particularly important.

Britain’s low birth rate means the population is ageing. ONS projections suggest that between 2024 and 2034 there will be around 6.4 million births but 6.85 million deaths — around 450,000 more deaths than births.

Deaths are projected to exceed births from around 2026 onwards. Without migration, Britain’s population would therefore begin to shrink.

At the same time, the pension-age population is increasing. That means fewer working-age people relative to those requiring pensions, healthcare and social care.

Governments then face an obvious response: bring in more working-age people.

There is an economic logic to that. But if population continues to increase without the housing supply increasing alongside it, pressure on homes increases again.

And that brings us back to the beginning of the cycle.

Migration Is Changing Britain’s Births Too

Migration also affects Britain’s demographics through the children born after people settle here.

In 2025, 34.6% of babies born in England and Wales had a mother born outside the UK, while 40.2% had at least one parent born outside the UK.

India remained the most common country of birth for both mothers and fathers, followed by Pakistan and Nigeria.

Historically, non-UK-born women have also had higher fertility than UK-born women, although the latest robust ONS comparison is from 2021.

The broader point is simple: migration changes Britain’s population not just through people arriving, but through the families they go on to have here.

Over time, that also changes the demographic makeup of the country.

Britain Is Chasing Its Tail

This is the contradiction politicians rarely join together.

We are told Britain needs immigration because the domestic birth rate is too low. There is truth in that: fewer births and an ageing population mean fewer workers supporting a growing retired population.

But population growth also increases housing demand. If Britain continues increasing its population without increasing housing supply sufficiently, prices and rents come under more pressure.

That makes it harder for younger adults to leave home, establish independent households and, for some, start families.

Birth rates then remain low, strengthening the argument that Britain needs more working-age migrants.

And the cycle continues.

The answer is not simply more immigration or zero immigration. Britain needs to tackle the underlying problems together: build more homes, make it easier for younger adults to establish independent households, and make having children financially achievable for people who actually want them.

And if governments decide Britain needs substantial immigration, housing and infrastructure need to expand alongside the population.

Because a fertility rate of 1.39 is not just a statistic about babies. It is a warning about Britain’s future workforce, housing market, public finances and population.

✍️ Jamie Jenkins
Stats Jamie | Stats, Facts & Opinions

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