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”.

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.

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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.

New Delhi: Foreign Direct Investment (FDI) in India surged by 73 per cent last year, bringing in USD 47 billion, according to UNCTAD. 

The increase was “mainly due to large investments in services — including finance, IT (information technology), and R&D (Research and Development) — as well as manufacturing, supported by policies aimed at integrating India into global supply chains”, the UN trade agency said in a report released on Tuesday.

India’s FDI growth rate was among the highest.

Investments in data centres in India totalled USD 7 billion during the first three quarters of last year, according to the latest issue of the Global Investment Trends Monitor. That put India in seventh place among the countries receiving investments for data centres during that period.

However, in the fourth quarter, FDI in the sector jumped significantly, making the sector ever more dynamic.

Google announced in October that it was investing USD 15 billion in an AI hub in Andhra Pradesh.

In December, Microsoft announced USD 17.5 billion investments in AI and cloud infrastructure, and data centres.

And also in December, Amazon said it would invest USD 35 billion in AI and other sectors.

These investments are likely to be spread over a few years.

Globally, the report said FDI increased last year by 14 per cent to USD 1.6 trillion.

“Industry trends in 2025 show that data centres now shape the FDI landscape; they accounted for one-fifth of global greenfield project values,” the report said.

With demand driven by AI infrastructure and proprietary digital networks, announced investments in the area exceeded USD 270 billion, according to the report.

Semiconductors was another area showing high growth, with the value of newly announced projects increasing by 35 per cent, it said.

In areas that were exposed to tariff risks, project numbers fell sharply by 25 per cent, according to UNCTAD.

Textiles, electronics, and machinery were among the sectors hardest hit, the report said.

Globally, most of the FDI flows went to developed economies, where collectively the increase was 43 per cent, amounting to USD 728 billion, according to UNCTAD.

With India being an outlier, developing economies saw a decline in FDI by 2 per cent to an estimated USD 877 billion, the report said.

UNCTAD said that for the third consecutive year, FDI in China declined.

It fell by 8 per cent to an estimated USD 107.5 billion, with the majority of investment concentrated in strategic and high-growth sectors, it added.

Overall, investor sentiment remained weak, UNCTAD said.

“The message is clear: headline growth overstates the recovery. Policymakers should focus on reviving real investment, not just financial flows,” it said.

Indicative of weak investor sentiment, the report said the value of international mergers and acquisitions fell by 10 per cent.

International project finance declined for the fourth consecutive year by 16 in value and by 12 per cent in the number of deals, falling to levels last seen in 2019, the report said.

The number of greenfield project announcements dropped by 16 per cent, even though a small number of mega-projects drove the high total project values, according to the report.