Readers Question: Hi and thanks for your article “UK Budget Deficit”. I am ‘new’ to economics, but trying to do my bit to get to understand it all. From your article I followed links and found the ”Pocket DataBank” published by the treasury. Being a bit retentive about things, I tend to learn by adding things up, and if I my total matches published totals, then I know I’ve understood things correctly.I got confused on tables 11A & 11b
On 11a, I found:
“FINANCIAL YEAR PUBLIC SECTOR BORROWING FIGURES (£ billion) >> Net Borrowing (ANNX) 2011/12″ = -123.8bn
But on 11b, it says
“PUBLIC SECTOR NET BORROWING (J5II) 2011/12″ = 124.7
And then your article quotes £119.3 billion
Would you be able to help me understand the differences?
I spend a lot of time researching data on government borrowing. It is definitely complicated by the fact that there are many different variations – different data series – of essentially the same thing. I once spent a long time researching debt statistics and came up with this post. Understanding debt statistics – but even that does not include every variation of the many different series and data tables. It does frustrate myself too.
I don’t want to further confuse you, but if you look at ONS site (the main place I go for statistics, you will see public sector net borrowing).
In 2011/12 public sector net borrowing was £121.6 billion; this is £4.4 billion lower than the Office for Budget Responsibility (OBR) forecasted net borrowing for 2011/12 of £126.0 billion
so that’s a 4th version to throw into the mix.
If you download the data set at ons – you will see even more complicated tables and different versions of essentially the same thing.
Why can data be different?
1. Data can get revised. E.g. GDP growth may be published as -0.7 for Q4 2012. But, in a later publication, it gets revised up to -0.5 for Q4 2012. Data isn’t exact.
2. There are different ways you can measure government borrowing
Public sector net debt and net borrowing are different data series, with slightly different ways of calculating annual government borrowing. (It’s a bit like having different versions of inflation CPI, RPI, RPIX) e.t.c
Government borrowing can be slightly different depending on how it is measure e.g. gross borrowing, net borrowing, borrowing according to Maastricht criteria. Then you have seasonally adjusted figures, adjusted for inflation e.t.c.
Although I spend considerable time with government debt statistics, I haven’t fully looked into all the minor differences because it’s not really crucial for what I’m trying to do. There probably is a reason for all these different series. But, you have to use your time wisely.
Basically, I would advise don’t worry too much about slight variations in data from different series. Whichever of the four we choose, it is roughly 9-10% of GDP.