National Statistics logo 2 December 2004

Economy

Public Sector
October: £0.4 billion current budget surplus


Public Sector Finances
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


This page printed from National Statistics Website.
Crown Copyright applies unless otherwise stated.