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Significant fall in government borrowing in December, figures show
UK government borrowing was significantly lower last month, due to more income from taxes and higher National Insurance Contributions outweighing spending, figures show.
In December government borrowing – the difference between public spending and tax income – was £11.6bn, the Office for National Statistics (ONS) said.
It is down £7.1bn – 38% – from the previous December, and lower than what many economists had predicted, but still higher than that borrowed in the same month in 2023.
Tom Davies, Deputy Director for the ONS public service division, said the fall was a result of “receipts being up strongly on last year whereas spending is only modestly higher”.
Despite the annual fall, the December 2025 figure was the tenth highest for the month since records began in 1993, without adjusting for inflation.
And it remains higher than December 2023, when borrowing stood at £8.1bn.
The figures show the government received £7.7bn more – an 8.9% rise – in taxes in December 2025 than it did in the same month in 2024.
This comprised increases in income tax, corporation tax, VAT and National Insurance contributions (NIC), the ONS said – with changes to the rate of NIC paid by employers coming into effect in April last year.
According to provisional estimates, borrowing over the financial year to December totalled £140.4bn, about £300m lower than the same period in 2024, the ONS said.
The borrowing figure was estimated as 4.6% of GDP – 0.2 percentage points down from the same period last year.
It was the third-highest level of borrowing over April-December on record, after those in 2020 and 2024.
Chief Secretary to the Treasury, James Murray, said the government was “stabilising the economy, reducing borrowing, rooting out waste in the public sector”.
He said: “Last year we doubled our headroom and we are forecast to cut borrowing more than any other G7 country with borrowing set to be the lowest this year since before the pandemic.”
Ruth Gregory, deputy chief UK economist at Capital Economics, said public finances were “finally showing signs of improvement in recent months”.
“What’s more, a further improvement in January is on the way. Those figures will probably show a bumper set of self-assessment tax and capital gains tax (CGT) receipts reflecting the freeze on income tax thresholds and a disposal of assets due to the speculation that Reeves would raise CGT.”
But she said the “big picture is that the pace of deficit reduction remains very slow”.
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CRISIL Ratings projects gold-loan NBFC AUM to grow at 40 percent CAGR, surpassing Rs 4.0 lakh crore by March 2027, driven by record gold prices and regulatory support.
Gold-Loan NBFCs Eye Rs 4 Lakh Crore AUM as High Gold Prices Drive Demand
Assets under management (AUM) of non-banking financial companies (NBFCs) specialising in gold loans are expected to grow at a sharp pace over the next two years, driven by record gold prices, rising demand for secured credit and regulatory support.
According to CRISIL Ratings, gold-loan NBFC AUM is set to clock a compound annual growth rate (CAGR) of around 40% between the current fiscal and the next, crossing Rs 4.0 lakh crore by March 2027. This is significantly higher than the 27% CAGR seen between fiscals 2023 and 2025.
High gold prices boost lending capacity
CRISIL Ratings noted that gold prices surged nearly 68% in the first nine months of the current fiscal, touching record highs. This sharp rise has enhanced collateral values, allowing lenders to increase disbursements against the same quantity of gold.
At the same time, limited availability of unsecured credit has pushed borrowers to explore alternative funding sources. Gold loans, backed by physical collateral, have emerged as a preferred option due to quicker processing and easier access.
NBFCs expand footprint despite bank competition
To tap rising demand, both large and mid-sized gold-loan NBFCs are expanding their presence, even as competition from banks intensifies.
“Large gold-loan NBFCs, with an established brand image, are scaling up portfolios through existing branches,” said Aparna Kirubakaran, Director, CRISIL Ratings. She added that mid-sized players are following a dual strategy—expanding branch networks while also acting as loan originators for larger NBFCs and banks.
These efforts have lifted business per branch by around 40% over the last two fiscals. Average AUM per branch stood at about Rs 14 crore in the first half of the current fiscal, compared with around Rs 10 crore in FY24, CRISIL Ratings said.
Regulatory changes to support growth
On the regulatory front, revised loan-to-value (LTV) norms for lower-ticket gold loans, effective April 1, 2026, are expected to provide additional lending headroom.
CRISIL Ratings estimates that LTV for lower-ticket bullet loans could rise from the current 65–68% to around 70–75% after factoring in accrued interest. This will allow borrowers to access higher credit against the same gold collateral, further improving loan attractiveness.
Shift from unsecured to secured credit
Demand is also being driven by a structural shift away from unsecured lending. “Following asset quality issues and stricter regulatory action in unsecured lending, gold loans have emerged as a strong alternative,” said Prashant Mane, Associate Director, CRISIL Ratings.
However, CRISIL cautioned that managing risks—especially LTV discipline, gold price volatility, and operational controls—will be critical for sustainable growth.
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January 22, 2026, 16:45 IST
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New traffic rules: The Indian government has introduced a new rule aimed at making roads safer by targeting traffic rule violators. According to the updated Motor Vehicles Rules, drivers who commit five or more traffic offences in one year could face suspension or cancellation of their driving licence. This change is part of a broader effort to reduce road accidents and encourage responsible driving.
Under the new guidelines, which are being applied from January 1, 2026, the licensing authority – such as the Regional Transport Office (RTO) or district transport office – now has the power to suspend or revoke a driving licence if a driver repeatedly breaks traffic rules within the same year. Earlier, licence suspension powers were mostly limited to serious offences like reckless driving or vehicle theft.
Key things to keep in mind:
Rule: Five or more traffic violations in one year can lead to driving licence suspension or revocation.
Authority: RTO or district transport office can take action based on the offence count.
Violations Count: Only offences within the same calendar year are considered.
Types of Offences: Includes serious and less serious violations (e.g., red light jumping, no helmet).
Driver Hearing: Drivers are generally given a chance to explain before final action.
Objective: To reduce repeat traffic violations and improve road safety.
How the new rule works?
The offence count is based on traffic violations committed within the same calendar year. If a driver commits five or more violations, even if they are less serious –such as jumping red lights or not wearing a helmet or seat belt –the authorities can take action. However, before any licence cancellation or suspension, the driver is usually given a chance to explain their side to the authorities.
Traffic experts say this move is significant because it holds habitual offenders accountable rather than just one-time violators. With more vehicles and faster traffic growth in Indian cities, road safety has become a priority for both central and state governments. Traffic regulators are also using automated systems such as e-challans and cameras to better track violations and help implement this rule effectively.
Road safety is one of the major concerns in India, with thousands of incidents reported every year due to traffic violations.
In 2006-07, a 1 percent withholding tax was imposed on commercial imports of gold in the country. Photo: Express News
Gold and silver prices declined in both international and domestic markets on Thursday. In the international bullion market, the price of gold fell by $8 per ounce to $4,832.
After the decline in the global market, gold prices in Pakistan also registered a drop. The price of gold per tola decreased by Rs800 to Rs505,562, while the price of 10 grams of gold fell by Rs686 to Rs433,437.
Silver prices also edged lower. The price of silver per tola dropped by Rs30 to Rs9,903, while the price of 10 grams of silver declined by Rs25 to Rs8,490.
Spot gold was steady at $4,836.09 per ounce, as of 0740 GMT, after scaling a record peak of $4,887.82 in the previous session.
US gold futures for February delivery also traded flat at $4,838.60 per ounce.
Spot silver rose 1.1% to $94.26 an ounce, after hitting a record high of $95.87 on Tuesday.
Spot platinum lost 0.4% to $2,472.33 per ounce after touching a record peak of $2,511.80 on Wednesday, while palladium gained 0.6% to $1,850.31.
Read: Gold prices hit record highs in global, Pakistan markets
Earlier on Wednesday, gold and silver prices reached new historic highs in both international and local markets.
In the international bullion market, the price of gold per ounce jumped sharply by $127 to reach a new high of $4,840.
In Pakistan, the price of gold per tola rose by Rs12,700 to a record level of Rs506,362.
Similarly, the price of 10 grams of gold increased by Rs10,888 to reach Rs434,123.
Silver prices also rose, with the price per tola increasing by Rs64 to a new high of Rs9,933, while the price of 10 grams of silver went up by Rs54 to Rs8,515.
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