The annual Bulletin articles on the distribution of the national debt have shown an increase in market holdings of the debt, in relation to gross domestic product, over the last ten years. This is partly because the nominal rate of growth of GDP has slowed considerably as inflation has fallen. By contrast, there has been a fall in relation to GDP if one takes the consolidated debt of the public sector as a whole; the fall is slightly larger if one takes the net debt of the public sector in which its liquid assets are netted off its consolidated debt. This note briefly explains the principal reasons for the divergence of trend.
The net debt of the public sector