Revenue and Expenditure Analysis - United Kingdom

The UK, a leading trading power and financial center, is one of the quintets of trillion greatly reduced public ownership and contained the growth of social welfare programs. The UK has large coal, natural gas, and oil reserves; primary energy production accounts for 10% of GDP, one of the highest shares of any industrial nation. Services, particularly banking, insurance, and business services, account by far for the largest proportion of GDP while industry continues to decline in importance. Since emerging from recession in 1992, Britain's economy has enjoyed the longest period of expansion on record; growth has remained in the 2-3% range since 2004, outpacing most of Europe. The economy's strength has complicated the Labor government's efforts to make a case for Britain to join the European Economic and Monetary Union (EMU). Critics point out that the economy is doing well outside of EMU, and public opinion polls show a majority of Britons are opposed to the euro.

Budget: revenues: $1.154 trillion

Expenditures: $1.239 trillion (2007 est.)

Fiscal year: 6 April - 5 April

Public debt: 43.6% of GDP (2007 est.)

Inflation rate (consumer prices): 2.3% (2007 est.)

The economy of the United Kingdom (U.K.) is 79.5 percent free, according to our 2008 assessment, which makes it the world's 10th freest economy. Its overall score is 0.5 percentage point lower than last year, reflecting worsened scores in four of the 10 economic freedoms. The U.K. is ranked 3rd out of 41 countries in the European region, and its overall score is much higher than the regional average.

Government revenue. expenditure and main aggregates

unit Millions of euro

geo United Kingdom

sector General government

time 2000 2001 2002 2003 2004 2005 2006 2007

p1 Output 321265.7 340239.9 368603.6 365620.9 406689.7 433929.5 462853.3 490905.1

te Total general government expenditure 625649.7 658985 701445.5 692603.9 759507 808426.4 857038.7 909558.1

tr Total general government revenue 647284.6 669501.7 669047.3 638819.9 700225.4 747788.8 806171.1 853781.7

Texpenditures - Trevenues ==> 21634.9 10516.7 -32398.2 -53784 -59281.6 -60637.6 -50867.6 -55776.4

Chain index 0.486099 -3.08064 1.660092 1.102216 1.022874 0.838879 1.096502

Over the analyzed period UK's government encountered periods with budget deficit and some with budget surplus. A Budget Deficit is where a government like the UK would spend more then take in tax revenues in period (usually a year). It is possible (not likely though) to have a Budget Surplus, this being the situation for years 2000 and 2001, when the revenues covered the expensed with €21634.9 mil and €10516.7 mil, respectively.

An increasing Budget Deficit refers to a Budget Deficit from a period as compared to the previous period. For example, the UK's budget deficit in 2005 was 60637.6 mil., which means that comparing this sum with the one from the previous year (2004, when the deficit was 59281.6 mil) we may say that the budget deficit grew in 2005 by 2.28 %. On the other hand, in 2006 the budget deficit decreased by 83, 89 % in comparison with 2005.

The United Kingdom experienced a budget deficit due to decline in British Manufacturing; this is due to foreign competition. The United Kingdom has been relying on imports from China etc. as they can produce goods cheaper, (due to lower labor costs etc.) This heavy reliance on imports has increased the UK's budget deficit although, the UK does make a surplus in "invisible" exports, and this is in services, such as finance, banking and tourism.

Nevertheless, a budget deficit does not mean United Kingdom it's a poor country, on the contrary!! Budget deficit does bring negative connotations if we look at the statistic data on its own, but we have to look at the bigger picture. We should remember that the UK has experienced consecutive economic growth for around ten years now. A budget deficit ACTUALLY indicates that the government has invested a lot into the country and its infrastructure.