Debt Highest Proportion Of GDP Yet

The public sector current deficit was £9.9bn in June 2009 according to the Public Sector Finances bulletin from the Office for National Statistics and HM Treasury. Public sector net borrowing was £13bn. The net cash requirement was £19bn and the net debt £798.8bn or 56.6% GDP. The public sector net debt for June was £657.5bn. In the year 2009/10 April to June there was a current budget deficit of £34.1bn and net borrowing of £41.2bn. The public sector net cash requirement was £42.8bn. The Budget 2009 predicted public sector current budget of £132bn, public sector net borrowing of £175bn and public sector debt excluding financial sector interventions of 55.4% GDP at end March 2010. Financial sector interventions have had some effect on financial data. It has reduced the Central Government Net Cash Requirement (CGNCR) by about £2.5bn, mainly due to the disposal of company securities, but was neutral for the public sector as a whole.

The Institute for Fiscal Studies said the public finance figures may give some encouragement to the Government as tax receipts fell by only 5.7% in June relative to June last year. It is a smaller rate of decline than the 7.4% predicted for the whole of 2009/10. The figures may at first suggest slower spending growth but in fact without the financial sector intervention it can be seen that spending continues to grow. Fears about the use of public sector investment not being able to stimulate the economy quickly enough have not so far been borne out as investment has been £2.6bn higher than the same period last year.