This page shows the current trends in UK national deficit. Also see charts on UK debt history.

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 less than one percent GDP in 2017. At the end of March 2020 the “current budget deficit” was a surplus of 0 percent of GDP.

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 steadily declined, down to £1.9 billion in 2018. At the end of March 2020 the “current budget deficit” was a surplus of £0.9 billion.

UK Deficit Since World War II

Chart D.03t: UK Deficits since 1947



The UK deficit started out in 1947 at 3 percent of GDP and then immediately went into surplus, as the Attlee government worked to reduce the huge debt racked up in World War II. The surplus peaked at 6.3 percent of GDP in 1950 and then declined to a surplus of 0.9 percent GDP in 1961.

But then surpluses started to climb again reaching 7.6 percent GDP in 1970 during the Wilson government before declining sharply. The UK scored a deficit of 0.1 percent GDP in 1975 for the first time in nearly 20 years.

The UK ran a budget deficit till the end of the Thatcher years, with a peak of 2.2 percent of GDP in 1981. In the mid to late 1980s deficits declined, and went into surplus in 1989 at 1.9 percent GDP.

Deficits returned in the Major years and the ERM crisis, reaching 5.7 percent GDP in 1994. But then the deficit came down and went into surplus, maxing out at a surplus of 2.3 percent GDP in 2001.

Moderate deficits were the rule in the mid 2000s Blair years. But the deficit rocketed upwards to 6.9 percent in 2010 in response to the Crash of 2008 and the Great Recession. In the recent recovery, the budget deficit has declined to less than one percent of GDP.