UK sales fell, borrowing beat the forecast, and Royal Mail missed its target
Retail volumes fell 0.5 per cent in July and public borrowing exceeded the OBR profile; Royal Mail's improving delivery rates also remained below Ofcom targets.
Economics & Markets··Evening
July borrowing exceeded the OBR profile by 2.3 billion pounds
UK public-sector borrowing was 1.8 billion pounds in July 2026, 0.7 billion pounds more than a year earlier and 2.3 billion pounds above the Office for Budget Responsibility forecast. Borrowing in the financial year to July reached 56.7 billion pounds. That was 6 billion pounds below the same period last year but still 2.3 billion pounds above the OBR profile. The current budget recorded a 3.1 billion pound surplus for the month. Public-sector net debt was provisionally 2,984.9 billion pounds at the end of July, equal to 94.1 per cent of GDP.[1]
Early promotions pulled demand into June
According to ONS, retail sales volumes in Great Britain fell 0.5 per cent in July. June's increase was revised from 1 per cent to 0.7 per cent, and retailers attributed the July decline to unusually early promotions that brought purchases forward. Non-food stores and non-store retailers both pulled back during the month. The wider period was stronger: volumes in the three months to July rose 1.1 per cent from the previous three months and 3 per cent from a year earlier. Hot weather supported sales of fans and the World Cup helped supermarket beverage sales, while the overall sales level remained 0.1 per cent below February 2020.[2]
Royal Mail improved delivery but missed Ofcom's targets
Royal Mail delivered 85 per cent of first-class post the next day between March and June. That was up from 76 per cent a year earlier but below Ofcom's 90 per cent target. It delivered 91 per cent of second-class post within three days, against a 95 per cent target. The company said first-class performance was ahead of its own plan and second class was tracking in line. A five-year investment programme of 500 million pounds is under way, with a commitment to meet Ofcom's targets by May 2027. The regulator is investigating Royal Mail for a second consecutive year; it imposed a record 21 million pound fine last October for missing the 2024-25 targets.[3]
