Editing Economy of the United Kingdom (section)

==Government spending and economic management==
{{see also|Budget of the United Kingdom|United Kingdom national debt}}
[[File:Bank-of-England.jpg|thumb|The Bank of England, London]]
Government involvement in the economy is primarily exercised by [[HM Treasury]], headed by the Chancellor of the Exchequer. In recent years, the UK economy has been managed in accordance with principles of market liberalisation and low taxation and regulation. Since 1997, the Bank of England's [[Monetary Policy Committee (United Kingdom)|Monetary Policy Committee]], headed by the Governor of the Bank of England, has been responsible for setting [[official bank rate|interest rates]] at the level necessary to achieve the overall inflation target for the economy that is set by the Chancellor each year.<ref>{{cite web |url=http://www.bankofengland.co.uk/about/more_about.htm |title=More About the Bank |access-date=8 August 2008 |url-status=dead |archive-url=https://web.archive.org/web/20080312060011/http://www.bankofengland.co.uk/about/more_about.htm |archive-date=12 March 2008 }} Bank of England – Retrieved 8 August 2008</ref> The Scottish Government, subject to the approval of the Scottish Parliament, has the power to vary the basic rate of income tax payable in Scotland by plus or minus 3 pence in the pound, though this power has not yet been exercised.

In the 20-year period from 1986/87 to 2006/07 government spending in the UK averaged around 40% of GDP.<ref name=csr>{{cite web|url=https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/203826/Spending_review_2010.pdf|title=Comprehensive Spending Review 2010|access-date=23 August 2015|publisher=HM Treasury}}</ref> In July 2007, the UK had [[government debt]] at 35.5% of [[GDP]].<ref name=Borrowing/> As a result of the [[2008 financial crisis]] and the [[Great Recession]], government spending increased to a historically high level of 48% of GDP in 2009–10, partly as a result of the cost of a [[2008 United Kingdom bank rescue package|series of bank bailouts]].<ref name=csr/><ref name=Borrowing>"[https://www.theguardian.com/news/datablog/2009/mar/01/government-borrowing-economy1 Britain's public debt since 1974]" ''The Guardian'', 1 March 2009</ref> In terms of [[Debt-to-GDP ratio|net government debt as a percentage of GDP]], at the end of June 2014 public sector net debt excluding financial sector interventions was £1304.6&nbsp;billion, equivalent to 77.3% of GDP.<ref name="ons2">{{cite web|url=http://www.ons.gov.uk/ons/dcp171778_371085.pdf|date=25 September 2014|title=Statistical Bulletin Office for National Statistics: Public Sector Finances, June 2014|access-date=25 September 2014}}</ref> For the financial year of 2013–2014 public sector net borrowing was £93.7&nbsp;billion.<ref name="ons2"/> This was £13.0&nbsp;billion higher than in the financial year of 2012–2013.

[[Taxation in the United Kingdom]] may involve payments to at least two different levels of government: local government and central government ([[HM Revenue & Customs]]). Local government is financed by grants from central government funds, [[business rates]], [[council tax]], and, increasingly, fees and charges such as those from [[decriminalised parking enforcement|on-street parking]]. Central government revenues are mainly from [[income tax]], [[national insurance]] contributions, [[Value Added Tax (United Kingdom)|value added tax]], [[United Kingdom corporation tax|corporation tax]] and [[fuel duty]].