Concentrating on one month in isolation can give a distorted picture as movements can be erratic. March's data completes the 2004/5 financial year. The provisional estimate is a deficit of£16.6 billion. In 2003/4 a deficit of£21.1bn was recorded. The Budget Report forecast for 2004/5 is a deficit of£16.1bn.
An alternative measure of the public sector fiscal position is public sector net borrowing. This additionally takes account of capital investment. In March 2005 there was net borrowing of£3.8bn, which compares with a£5.5bn in March 2004. The provisional estimate for the 2004/5 financial year was net borrowing of£34.5bn. In 2003/4 net borrowing of£35.7bn was recorded. The Budget Report forecast for 2004/5 was net borrowing of£34.4bn.
Public sector net debt, expressed as a percentage of gross domestic product, was 34.5 per cent at the end of March, compared with 32.8 per cent at end of March 2004. Debt peaked at 44.0 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 29.7 per cent in February 2002. Since then it has risen. The Budget Report forecast for the end of March 2005 is 34.4 per cent.
Net debt was£415.3bn at the end of March, compared with£376.0bn a year earlier. The Budget Report 2005 forecast net debt at the end of March 2005 is£415.0bn.