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A record\u00a0government\u00a0borrowing surplus last month has given the Chancellor a welcome boost\u00a0ahead of the spring statement.<\/p>\n
The Office for National Statistics (ONS) said the surplus \u2013 when the government receives more than it spends \u2013 came in at \u00a330.4 billion in January, the highest for any month since records began in 1993.<\/p>\n
It rose on the back of self-assessed tax payments and a fall in debt interest to the lowest level since March 2020.<\/p>\n
The surplus was also \u00a36.3bn bigger than predicted by the Office for Budget Responsibility (OBR) and \u00a315.9bn higher than the same month a year ago.<\/p>\n
ONS chief economist Grant Fitzner said: \u201cJanuary \u2013 which is traditionally a strong month for self-assessed tax receipts \u2013 saw the highest surplus since monthly records began.<\/p>\n
\u201cRevenue was strongly up on the same time last year, while spending was little changed, due to lower debt interest payments largely offsetting higher costs on public services and benefits.<\/p>\n
\u201cAcross the first 10 months of the current financial year, borrowing is lower than the same period a year ago.\u201d<\/p>\n
Chief Secretary to the Treasury, James Murray said: \u201cWe have the right plan to build a stronger, more secure economy. We have doubled our headroom, we are bringing inflation down, we are making sure that taxpayers\u2019 money is spent wisely, and borrowing this year is forecast to be the lowest since before the pandemic.<\/p>\n
\u201cWe know there is more to do to stop one in every \u00a310 the government spends going on debt interest, and we will more than halve borrowing by 2030-31 so that money can be spent on policing, schools and the NHS.\u201d<\/p>\n
The Institute for Fiscal Studies noted that the government normally runs a surplus in January, though today\u2019s figure is\u00a0more than\u00a0double\u00a0the figure\u00a0for the same month\u00a0last year, and\u00a0a\u00a0\u00a36\u00a0billion\u00a0improvement on\u00a0OBR\u2019s forecast\u00a0from\u00a0November.\u00a0<\/p>\n
Emeritus Professor Joe Nellis, economic adviser at MHA, said: The Government\u2019s revenue was \u00a330.4bn higher than its expenditure in January, a remarkable result for the Chancellor ahead of the Spring Statement in March.<\/p>\n
\u201cUK bond yields have also fallen in recent months, reflecting greater stability in the economy. This relative stability offers the government some short-term reassurance.<\/p>\n
\u201cHowever, this improving picture is not without risk. Recent political uncertainty has the potential to disrupt these projections, particularly if it delays policy decisions, weakens business confidence, or leads to changes in fiscal priorities. <\/p>\n
\u201cUncertainty around future tax policy, spending commitments or the timing of key economic decisions could affect investment, slow growth and, in turn, put renewed pressure on government revenues.\u201d<\/p>\n
Government borrowing this year is forecast to be the lowest in 6 years as a share of GDP, and\u00a0the UK is reducing borrowing more than any other G7 country between 2025 and 2030. It\u00a0is forecast to more than half from 4.5% in 2025-26 to 1.9% in 2030-31.\u00a0<\/p>\n
Net financial debt (PSNFL) is forecast to be lower as a share of GDP by the end of the forecast (2030-31) than today (2025-26).\u00a0\u00a0<\/p>\n
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