Week 34, 2012: UK Budget Surplus/Deficit

Summary: Public Sector Finance figures for July came out this week, showing that net borrowing was up £3.4bn and the budget surplus was down £3bn on the same month last year. We look at annual budget surpluses/deficits over the past 65 years.

What does the chart show? The chart shows the annual surplus on the current budget in millions of pounds.  A positive number means the UK government received more money than it spent (a surplus) for that calendar year, and a negative number means there was a deficit.  This includes all expenditure (and receipts) as a result of financial interventions.  Inflation has not been taken into account.

Why is the chart interesting? For thirty years between 1946 and 1976, the budget was relatively balanced.  Some of the volatility that followed can be blamed on inflation, but out of the thirty five years between 1976 and 2011, the budget was only in surplus for seven of them, with the peak coming in 2000. The biggest budget deficit on record was in 2010.

Although the budget position improved slightly in 2011, the first half of 2012 so far has not been positive.  The dotted line at the end shows the estimated outcome for this year, based on how 2012 has so far compared to previous years.  In reality, the final outcome could be much worse.