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Definitions
Market holdings of Central Government Gross Debt consist of all holdings outside of the central government sector, but include holdings by local government, public corporations and the Issue and Banking Departments of the Bank of England. They exclude holdings by other central government bodies (principally the Debt Management Office, the Commissioners for the Reduction of the National Debt, other government departments and the Exchange Equalisation Account). They also exclude debt guaranteed by the government (e.g. London and Continental Railways).Market holdings of sterling Central Government Gross Debt presented here exclude non-interest bearing notes held by the International Monetary Fund (IMF). Although these are liabilities of the National Loans Fund (NLF), they are not part of Central Government Gross Debt since they are netted off the Reserve Tranche Position – part of central government assets.
Other components of sterling Central Government Gross Debt are:
British government securities (BGS): marketable, interest-bearing securities issued by the UK government. The nominal value of index-linked gilt-edged stocks has been increased by the amount of accrued capital uplift. The whole nominal value of all issued stocks is recorded, even where there are outstanding instalments due from market holders.
Treasury bills: short term instruments with variable maturity. The bills are sold at a discount and redeemed at par, and can be traded on the secondary market. The amount of discount depends on the price accepted by the Debt Management Office (DMO) at their tender.
National savings products: non-marketable debt comprising publicly available products. Savings bank comprises deposits on ordinary accounts of the National Savings Bank plus the liability to the Trustee Savings Bank of the Fund for the Banks for Savings (a government fund operated by the National Investment and Loans Office) which has been zero since the end of June 1986.
Certificates of tax deposit: non-marketable debt available to tax payers generally that may be used in payment of most taxes.
Other sterling debt: includes Ways and Means advances (the method by which government departments etc. lend overnight to the NLF); DMO outstanding transactions with the market; NILO stocks (non-marketable stocks, issued directly to the National Debt Commissioners, whose terms reflect those on existing BGS); and the temporary deposit facility (deposits by central government bodies and public corporations with the NLF; and local government deposits with the DMO). It also comprises market holdings of Northern Ireland government debt (principally Ulster Savings Certificates), the balances of certain public corporations with the Paymaster General, other third party deposits (from the Insolvency Service), funds held on behalf of the European Commission, and net liabilities, guaranteed by government, of the Guaranteed Export Finance Company (GEFCO), since its reclassification to the central government sector from 1987.
Coin in circulation
Funds lodged in courts: deposits with the National Debt Commissioners of funds lodged in courts.
Market holdings of foreign currency Central Government Gross Debt are converted to sterling at end-period middle-market closing exchange rates and are comprised of:
Foreign currency bonds: denominated in US$ and Euro.
Euro Treasury notes: three-year instruments issued on a rolling programme.
Euro Treasury bills: short term instruments with a maturity of between one and six months. These were discontinued in April 1999 and replaced by Bank of England Euro Bills.
Other foreign currency debt: includes long term post-war loans from the governments of the USA and Canada and assigned debt (debt originally drawn under the Exchange Cover Scheme transferred to the government following privatisations of public corporations).
Information on residual maturity of market holdings of total Central Government Gross Debt and foreign currency National Debt is included here in accordance with IMF guidelines for dissemination of government debt statistics. Residual maturity indicates the time to elapse before the debt becomes repayable.
The local government sector comprises all bodies required to make returns under the various local government acts. It consists of county and district councils in England and Wales; regional councils in Scotland; district councils in Northern Ireland; bodies having the right to precept on these councils (such as police forces, magistrates courts, and fire services) and residuary entities.
The trading activities of local government, such as housing and aerodromes, are included. Companies that operate passenger transport services and large airports are excluded. Companies set up by local government bodies to undertake conventional local government services, such as refuse collection or school meals, are also excluded.
Local Government Gross Debt comprises both short term debt (revenue bills and ‘temporary money’) and long term debt (negotiable bonds; listed securities; borrowing from the Public Works Loan Board; direct borrowing from abroad; and ‘other’ long term borrowing, including ‘over-the-counter’ bonds.
General Government Consolidated Gross Debt (GGCGD) comprises central government and local government gross debt with holdings of each other’s debt netted off to produce a consolidated total (i.e. the total of general government debt held outside the general government). This is the Maastricht measure of GGCGD submitted to the European Commission under the terms of the Stability and Growth Pact. The percentage data are based on the average measure of GDP at current market prices in four quarters centred on 31 March. Estimates for the second and third quarters of 2001 are based on HM Treasury forecasts.
Public corporations, as defined in the national accounts, are trading bodies which have a substantial degree of financial independence from the public authority which created them, including the powers to borrow and to maintain reserves.
Public Sector Consolidated Gross Debt includes central government, local government and public corporations gross debt. All holdings of each other’s debt by these three parts of the public sector are then netted off to produce a consolidated total (i.e. the total of public sector debt held outside the public sector).
Public Sector Net Debt is derived from Public Sector Consolidated Gross Debt by deducting the public sector’s holdings of liquid assets.
Official reserves: These are at the official dollar valuation converted to sterling at the end-month middle-market closing date.
Instalments due on British government securities: The National Debt includes the whole nominal value of all issued stocks, even where there are outstanding instalments due from market holders; in such circumstances a counter-entry is included within liquid assets.
Short-term assets: These include deposits with banks, building societies and other financial institutions, and short-term assets held by the DMO.
One of the government’s fiscal rules for debt – the sustainable investment rule – is stated in terms of net debt as a percentage of GDP, where GDP is centred on the point where the debt level is measured. This requires an estimate of GDP to be available covering the period from six months before to six months after. A mechanical procedure is used to derive GDP figures for those periods where national accounts outturn data are not available, and to produce monthly GDP figures. The procedure computes the quarterly growth rates implied by HM Treasury’s latest published figures from money GDP in the previous year and its forecasts for the current and following financial years, and applies those growth rates to the latest published outturn quarterly GDP figure. As a result of this estimation procedure, the debt ratio is provisional when first published and subject to later revision when outturn GDP data become available.
Further information
Public Sector Net Debt data continues to be published by the Office of National Statistics in Chapter 1 of Financial Statistics.
Public Sector Net Debt: end-March 2003 Burton P, Statistics article, November 2003
This page was last updated 31 January 2023