Economy
Public Sector October: £0.4 billion current
budget surplus
In October 2004
the public sector showed a surplus on current budget of £0.4 billion,
compared with a surplus of £1.3 billion in October
2003.
Concentrating on one month in isolation can give a distorted
picture as movements can be erratic. Focusing on the financial year to
date generally provides a better overview. Between April and October of
the financial year 2004/5, the public sector recorded a deficit of £17.2
billion. At the same stage of the 2003/4 financial year a deficit of £15.6
billion had been recorded.
More generally the public sector
recorded deficits between 1991/2 and 1997/8 before moving into surplus in
1998/9. The deficit for 2002/3 was the first deficit recorded since
1997/8.
An alternative measure of the public sector fiscal
position is public sector net borrowing. This additionally takes account
of capital investment. In October 2004 there was net borrowing of £0.8
billion, which compares with a minus £0.4 billion in October 2003. In
financial year 2003/4 there was net borrowing of £34.8 billion. The Budget
forecast for 2004/5 is net borrowing of £32.9 billion.
Public
sector net debt, expressed as a percentage of gross domestic product
(GDP), was 33.3 per cent at the end of October, compared with 31.7 per
cent at end of October 2003. Debt peaked at 44.0 per cent of GDP in 1997,
its highest since the mid 1980s. The debt ratio then fell steadily as
public sector finances improved, reaching a low of 29.7 per cent in
February 2002. Since then it has risen. The Budget forecast for the end of
March 2005 is 34.4 per cent.
Net debt was £393.0 billion at the end
of October, compared with £355.2 billion a year earlier. The Budget 2004
forecast for net debt at the end of March 2005 is £416 billion.
The format summarises the public sector finances
presentation in Budget 2004 (HM Treasury, 17 March 2004). The statistics
are used to monitor progress against the Government's key fiscal
rules.
Published on 18 November 2004 at 9:30
am |