An apparatus for variable bit rate control in moving picture compression. First, a total activity measure for the current picture to be encoded in a set of consecutive pictures is calculated. Based on the total activity measure of the current picture and an activity-to-complexity ratio of a previously encoded picture of the same type in the set of consecutive pictures, a complexity measure of the current picture is estimated. A statistical complexity measure is then calculated from the complexity measure of the current picture. A target bit budget is allocated to the current picture depending on the instantaneous rate, the complexity measure and the instantaneous complexity measure. After encoding the current picture, the activity-to-complexity ratio for the current picture is computed based on the total activity measure, actual bits consumed by the current picture and an average of actual quantization step sizes used to encode the current picture.