GDP

High

Average

Year

2014

1960-2015

USD Billion

2990

1081.01

GDP
growth
rate

High

Average

Year

1973

1956-2016

9.8

2.46

Unemploym
ent Rate

High

Year

1984

12

Low
196
0
72.3
3

Low
196
0
6.10

Average

Low

19712016
7.14

197
3
3.4

Inflation

High

Average

Year

2011

1997-2016

3.7

1.58

Low
200
0
-0.1

Interest
Rate

High

Average

Low

Year

1979

1971-2016

17

7.78

201
6
0.25

Income
Tax

High

Average

Low

Year

2010

1995-2016

50

42.27

199
6
40

Average

Low

Corporate
Tax

High

201
5
20

Year

1982

1981-2016

52

32.31

Saving

High

Average

Year

1993

1955-2016

15.5
0

8.4

-0.9

Budget
Defecit

High

Average

Low

Year

2000

1995-2015

1.2

7.14

200
9
10.8

Minimum
wage

High

Average

Low

Year

2016

2005-2016

GBP/Hour

7.2

6.03

Low
195
8

200
5
5.05

Budget Deficit
For the fiscal year ending in March 2017:
The current budget deficit* is estimated to be 19.1 billion.
The difference between spending (including capital expenditure) and
revenue is estimated to be 67.6 billion.
The increase in UK net debt is estimated to be 47.8 billion.

Net borrowing was highest in 2009-2010 with 167.4bn. It was caused by:
The financial crisis which led to falling tax revenues, e.g. lower incomes led to less income
tax revenue; fewer house sales led to lower stamp duty.
Expansionary fiscal policy including VAT cut
Higher spending on unemployment benefits during the recession.

Long term spending commitments, e.g. government spending increases in the early 2000s.

As a country, we've grown accustomed to living beyond our means. The

Government's tax revenues are rarely enough to fulfill its generous spending
promises, so every year Britain runs a large budget deficit. The money we can't
raise from taxation needs to be borrowed, and as taxpayers, we're the
guarantee on the loan. Every year, this budget deficit is added to our national
debt.

In 1997 Labour inherited a budget that was actually in balance. After a painful
and turbulent decade under the Tories, the public finances had finally been
brought under control. But after four years in office Gordon Brown took out
the country's credit card and let rip. By the end of 2009-10 our annual deficit
had ballooned to 170.8 billion.

This graph shows how the UK's budget deficit has fluctuated as a percentage
of the country's economic output (GDP):

Over the last 6 years the deficit has been cut by almost two-thirds from
its 2009-10 post-war peak of 10.1% of GDP to 4% last year. But the
deficit remains high and the outlook for the public finances has
deteriorated since Budget 2016.
33

Between 1980 and 2014 spending on working-age welfare trebled in real

terms.
The majority of UK debt used to be held by the UK private sector, in particular, UK insurance
and pension funds. The private sector have been seeking to reduce their debt levels and
increase savings (e.g. buying government bonds). This increase in savings led to a sharp fall in
private sector spending and investment. The increase in government borrowing is making use of
this steep increase in private sector savings and helping to offset the fall in AD

In 2005 the UK current budget deficit was less that 20 billion.

But then came the worldwide financial crisis of 2008 and
subsequent recession. The budget deficit skyrocketed to 50 billion
in 2009 and 103 billion in 2010. In the subsequent recovery the
deficit has slowly declined, reaching 40 billion in 2016.

In terms of Gross Domestic Product the UK current budget deficit

in 2005 was less than 2 percent of GDP, and declined to about 0.6
percent GDP in 2007 and 2008. In the Great Recession the deficit
ballooned, to 6.9 percent of GDP in 2010. Since then the deficit has
steadily declined, to 2 percent GDP in 2016