Professor Joe Nellis is economic adviser at MHA, the accountancy and advisory firm.

UK public sector net borrowing totalled around £11.65 billion in November, underlining the continued pressure on the public finances as the economy approaches 2026. While the figure was broadly in line with expectations, and lower than previous months it reinforces the reality that fiscal conditions remain tight.

The continued large borrowing total justifies the Chancellor’s decision to create a larger fiscal headroom than planned, although the headroom remains historically small.

The November outturn reflects a persistent imbalance between revenues and spending. Economic activity remains subdued with little or no growth expected in Q4, limiting the pace of growth in tax receipts, while government expenditure continues to be supported by elevated debt interest payments and ongoing pressure on public services.

For the government, the figures offer little room for complacency. Borrowing at this level constrains future policy choices and leaves limited headroom for discretionary fiscal measures.

There are positive movements in the cost of servicing the debt — inflation has fallen to 3.2% and bond yields have stabilised in the final quarter of the year — but government debt repayments remain high.

Decisions on taxation, public spending and investment will need to remain tightly managed to avoid unsettling financial markets. Failure to do this will lead to even higher bond yields with knock-on consequences for corporate borrowing and mortgage costs.

As the UK looks ahead to 2026, November’s borrowing figures serve as a clear reminder: fiscal policy remains constrained, and credible management of the public finances will be central to economic stability in the period ahead.

Rajeev Shaunak, head of consumer at MHA, comments on today’s ONS retail statistics:

“Retail sales remained flat this November, after a weak October, indicating that the much-anticipated Black Friday week rush failed to materialise for retailers. As the festive season approaches, many on the High Street will be hoping for a further spending boom that seems increasingly unlikely. We should learn more after the details of Saturday’s footfall emerges given it is the busiest shopping day of the year.

Despite the early present of inflation falling more than expected earlier this week and an interest rate cut yesterday, evidence suggests households are tightening their belts ever tighter. With inflation still well above the government’s 2% target, many consumers are unlikely to splash out on expensive festive treats and gifts, making for a subdued Yuletide for retailers.

Consumers continue to remain under pressure from “fiscal drag”, as the freezing of income tax thresholds for the past five years means more people are pulled into higher tax brackets. At the same time even as pay packets edge up, inflation continues to eat away at disposable income, leaving less to spend on Christmas luxuries.

In the food sector, it may look as though tills are jingling, with sales values on the rise. However, this is largely due to inflation, rather than increased demand. Many shoppers are being forced to trim their Christmas shopping lists, putting fewer expensive festive goodies (M&S Beef Wellington aside) in their trolleys as they try to stretch their budgets.

Non-food retailers face an even more volatile environment. While certain categories like technology have seen temporary spikes due to new product releases, clothing and department stores have struggled with inconsistent demand. For example, clothing sales peaked during the summer months but dropped sharply in the autumn as consumers prioritised “needs” over “wants.”

In non-food, the struggle is not just about price, but about relevance; with discretionary income shrinking, any purchase that isn’t seen as essential is being deferred or cancelled entirely. This could leave retailers with excess stock that may trigger pre and post Christmas sales as they try to offload stock at the expense of margin.”