Fuel and travel costs are pushing prices up again
Thursday 5 November 2026
Inflation has risen to 3.1%, meaning everyday spending is getting more expensive just as household budgets are already under pressure.
Primary deficit
The gap when public spending, excluding debt interest, is greater than public income.
What it means
Start with a budget deficit and set aside the interest the public sector pays on its debt. If the rest of its spending is still greater than the money coming in from taxes and other sources, that gap is a primary deficit. If the money coming in is greater than spending before debt interest, the result is a primary surplus instead. This measure helps separate this year's spending and income from the cost of past borrowing.
Example
In a made-up year, the public sector receives £100 billion and spends £110 billion before debt interest. Its primary deficit is £10 billion. If it also pays £5 billion in debt interest, its overall deficit is £15 billion in this simplified example.
Why it matters
A government can have a primary surplus and still run an overall deficit if interest on existing debt is large enough.
Also known as
primary budget deficit
Related terms
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Budget deficit
The gap when the government and wider public sector spend more than they receive over a period.
Read more -
Debt interest
Interest the public sector pays on money it has borrowed.
Read more -
Fiscal policy
Government decisions about taxes, spending and borrowing.
Read more -
Public sector net debt
A UK measure of the public sector's outstanding debts after subtracting certain assets it can quickly turn into cash.
Read more
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