UK budget deficit hit 3.6% of GDP in 2005

Britain's budget deficit exceeded European Union norms once again in 2005, but the government insisted yesterday it was sticking to the spirit of the Maastricht Treaty.

The deficit, measured under EU guidelines, totalled £43.7 billion in 2005 or 3.6 per cent of total output, official data showed.

The Office for National Statistics said that compared with general government net borrowing of £37.6 billion or 3.2 per cent of GDP in 2004.

General government borrowing is referred to as the government deficit in the Maastricht Treaty and countries are meant to keep it below three per cent of GDP although that is with reference to the fiscal year, not calendar.

"The UK continues to have the lowest average debts and deficits of any major European economy with the public finances sustainable and increases in public investment fully affordable," said a Treasury spokesman.

"As set out in the Budget last week, the UK treaty deficit is forecast to fall to three per cent in the coming fiscal year, and will reach 1.6 per cent by 2010/11. The government's projections are therefore fully consistent with a prudent interpretation of the Stability and Growth Pact."