Show Hide image UK 21 April 2015 What is the deficit? The deficit is the gap between government spending and income. Print HTML If a government doesn’t raise enough funds – mainly through taxes – to meet what it spends, it results in a deficit. A deficit is often a symptom of a recession, as more money is spent on help such as unemployment benefits or even targeted bailouts to private companies (such as the money given to UK banks in 2008, which totalled around £500bn). To make up the shortfall, countries often borrow money, creating national debt. The deficit is therefore an indication of how a country’s finances are doing in the short term; the national debt is a longer-term picture. During the first financial quarter of 2015, the UK government debt amounted to £1.56trn, over 80 per cent of GDP. The deficit in the last quarter of 2014 was £25.3 billion, down from £27.7bn in the third quarter. (Source: Office of National Statistics) › Why the SNP would struggle to hold Labour to ransom From only £1 per week Subscribe More Related articles Jeremy Corbyn challenged by Labour MPs to sack Ken Livingstone from defence review How the shadow cabinet forced Jeremy Corbyn not to change Labour policy on Syria air strikes How did I, obsessed with non-places, not know about the Trafford Centre?