Britain borrowed more than forecast in the first six months of the fiscal year, highlighting the constraints facing Chancellor of the Exchequer John Healey ahead of his inaugural budget next week.

The deficit for April to September widened to £97.8 billion ($130 billion) — £6 billion more than the Office for Budget Responsibility predicted in March. Borrowing in September was £24.5 billion, above the OBR forecast and the shortfall a year earlier.

The figures are the last snapshot of the public finances before the Oct. 28 budget, when Healey must set the agenda of Prime Minister Andy Burnham’s new administration without alarming bond markets concerned about the level of government debt. Government debt exceeded £3 trillion for the first time.

The borrowing overshoot so far in 2025-26 came despite tax receipts beating OBR forecasts as the economy proves resilient to the energy shock unleashed by the conflict in the Middle East.

Instead the deterioration reflected a sharp rise in government spending, with accelerating inflation pushing up the cost of goods and services, welfare and debt interest.

In September, debt costs came in at £10.9 billion, above the £9 billion forecast by the OBR, due to a pickup in RPI inflation boosting payments on index-linked gilts. Another double-digit interest bill is expected in October.

Burnham has set out a series of ambitious policy goals from social care to council housing, but Healey’s room for maneuver is limited given the rise in borrowing costs caused by the Iran war is estimated to have halved the £23.6 billion fiscal margin he inherited from his predecessor.

Some of the loss will be mitigated if, as some expect, the OBR upgrades its wage growth forecast, allowing the chancellor to avoid major tax rises or spending cuts.

Healey has said he’ll provide “breathing space” for families and businesses but reinforced the need for fiscal discipline.