Public Sector
October: £1.0bn current budget surplus
In October 2008, the public sector showed a surplus on current budget of £1.0 billion, compared with a surplus of £4.0 billion in October 2007.
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 2008 and October 2008 of the financial year 2008/09, the public sector recorded a deficit of £23.3 billion. At the same stage of the 2007/08 financial year, a deficit of £9.5 billion had been recorded.
More generally, the public sector recorded deficits between 1991/92 and 1997/98 before moving into surplus in 1998/99. Deficits have been recorded since 2002/03.
An alternative measure of the public sector fiscal position is public sector net borrowing. This additionally takes account of capital investment. In October 2008, there was net borrowing of £1.4 billion, which compares with borrowing of £-1.8 billion in October 2007. The Budget forecast for 2008/09 is net borrowing of £43.0 billion.
Public sector net debt, expressed as a percentage of Gross Domestic Product (GDP), was 42.9 per cent at the end of October 2008, compared with 42.6 per cent at end of October 2007. Debt peaked at 44.2 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 29.1 per cent in February 2002. Since then it has risen. The Budget forecast for the end of March 2009 is 38.5 per cent.
Net debt was £640.9 billion at the end of October, compared with £607.1 billion a year earlier. The Budget forecast for net debt at the end of March 2009 is £581 billion.
Public sector net debt (excluding Northern Rock) The most recent figures for public sector net debt excluding Northern Rock are for September 2008, when net debt was £563.1 billion (37.8 per cent of GDP).
Source: Office for National Statistics
Note: The format summarises the public sector finances presentation in the Budget Report 2008 (HM Treasury, 12 March 2008). The statistics are used to monitor progress against the Government's key fiscal rules.
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Public Sector Finances Press release