Causes of recent UK Deficit In 2008 the UK deficit was around £10Bn - in 2010 it had reached around £100Bn.

I realise this was due to the "global recession" but exactly why did the deficit grow so much?

My understanding is the deficit is the UK Treasury income less expenditure, so did income drop (and why) or did expenditure increase and again, why?

I imagine the recession would show a reduction in tax receipts but £100Bn seems excessive and also there may be some increased borrowing leading to increased debt payments but again the figures seem huge.

Was it the bank bail-outs to blame?

My data is from here.

Finally is austerity likely to return the UK treasury to surplus given that there is a finite amount of spending that can realistically be cut?
The chart you are looking at is off by a year: it should have shown about £10 billion in 2007 and almost £100 billion in 2009.  See the ONS figures for the "Public sector current budget deficit, excluding public sector banks" and click on "table" and "year"

It is more common to look at "Public sector net borrowing, excluding public sector banks" but the story is similar: about £37 billion in 2007 and about £153 billion in 2009

There was a reduction of about £25 billion in central government current receipts  and an increase of about £60 billion in central government current expenditure  plus some other things happening.  Falling receipts included lower corporation and income taxes and part of a 12 month cut in VAT, while increasing expenditure included support for banks and increased numbers of people claiming unemployment and other benefits.  Interest payments (part of expenditure) actually fell by about £4 billion due to lower interest rates, though they rose the following year due to the increased debt

You can find more data in the ONS Public Sector Finances time series dataset spreadsheet