Deficit vs national debt
The nutshell
The deficit is the gap between what the government spends and what it raises in one year. The national debt is the total it owes after many years of borrowing to cover those gaps.
Every fact on this page comes from the official budget watchdog and non-partisan researchers. Each source tag — like OBR — opens where a fact comes from.
The basics
The deficit: one year at a time
Each year the government raises money, mostly from taxes. Each year it also spends money on things like the NHS, schools, pensions and roads. When spending is higher than what is raised, the government borrows to cover the gap. That yearly gap is the deficit.OBR Another name for it is public sector net borrowing.
The national debt: the total owed
The national debt is different. It is the total the government owes after many years of borrowing. The House of Commons Library describes it as the total amount owed from past borrowing.HoC Every yearly deficit gets added on top, so the debt is the pile that builds up from all the past gaps.
Paying to borrow
Borrowing is not free. Each year the government pays interest on the money it owes. The House of Commons Library calls this debt interest — the cost of servicing the debt.HoC The more the debt grows, the more can be spent on interest instead of on services.
Why the two get mixed up
The deficit and the debt sound alike but measure different things. The deficit is one year. The debt is every year added together. Full Fact points out that cutting the deficit is not the same as paying down the debt.FF As long as there is a deficit, the debt keeps rising, just more slowly.
- One argument holds that borrowing for long-lived things, like new buildings and railways, can be worth it, and UK fiscal rules have often treated this kind of borrowing separately from day-to-day spending, the Institute for Government notes
- The Office for Budget Responsibility records that governments run a deficit far more often than a surplus, so some borrowing has been the normal state for many years
- The Institute for Government points out that debt is usually judged against the size of the economy, not by the cash total alone, so a growing economy can carry a larger debt
- The House of Commons Library records that as the debt grows, more of each year's money goes on debt interest instead of on services
- Full Fact stresses that a smaller deficit still adds to the debt, which only falls when the government raises more than it spends
- The Office for Budget Responsibility warns that a high stock of debt leaves less room to borrow again in a future crisis
The deep end6 min
Deficit and debt, defined
The deficit is a flow, measured over one year. The national debt is a stock, measured at a single moment. The Office for Budget Responsibility explains that when spending in a year is higher than what is raised, the government borrows to cover the difference, and that yearly gap is the deficit.OBR The Institute for Government explains that the most common debt measure, public sector net debt, is the running total of the difference between what the public sector takes in and spends over time.IfG Each year's deficit adds to that running total.
How big are the numbers
The Office for Budget Responsibility forecast a deficit of about £133 billion for 2025-26.OBR Over the years, borrowing like this has built the national debt up to close to the size of one whole year of the UK economy.OBR Because the debt is so large, the yearly cost of interest on it is now one of the government's bigger bills, according to the House of Commons Library.HoC
What the debate is about
In the UK, little argument is about the meaning of these words. Most argument is about how much borrowing is wise, and how fast the debt should be brought down. One view holds that borrowing to pay for long-lived things, like new buildings and railways, can be worth it, and UK fiscal rules have often treated this kind of borrowing separately from day-to-day spending, the Institute for Government notes.IfGAnother view stresses the cost, because as the debt grows more of each year's money goes on interest instead of services, the House of Commons Library records.HoC Full Fact adds a point both views accept, that a smaller deficit still adds to the debt, which only falls when the government raises more than it spends.FF