"UK Government borrowing has fallen to its lowest annual level in 11 years, according to the latest official figures". So say the BBC business pages today.
We are told that (i) borrowing fell by £3.5bn to £42.6bn in the 2017-18 financial year, (Office for National Statistics (ONS)) (ii) this was below the estimate of £45.2bn produced by the independent Office for Budget Responsibility last month (iii) borrowing narrowed to 2.1% of gross domestic product (GDP) last year, down from 10% in 2010 (iv) total public debt as a percentage of GDP edged up to 86.3%, up from 85.3% the year before (v) in cash terms it stands at £1.798 trillion. The figures are apparently the first provisional estimates of the last financial year. The ONS stressed they would be revised as more data becomes available.
The truth of the matter from an accounting point of view, taking these figures, is that additional UK Government borrowing (and not simply borrowing) has fallen to its lowest annual level in 11 years and that UK government borrowing has actually increased by a large amount in the period reported on.
When we think of the UK's balance sheet being handed to our children and grandchildren and now great grandchildren, we should be aware that this news should be seen not only from a cash flow perspective (additional borrowing has fallen in a short period compared to prior periods) but also understood from a balance sheet standpoint (borrowing has actually dramatically increased).
Charles Dickens has some wise counsel for the UK from his grave: "Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery." David Copperfield
UK government borrowing lowest for 11 years