2024.02.2110:46:00UTC+00UK Budget Surplus Hits Record High

Britain registered a record budget surplus in January on self-assessed tax but the excess remained below the government's estimate, official data revealed Wednesday.

Public sector net borrowing, or PSNB, excluding public sector banks was in surplus by GBP 16.7 billion in January, the Office for National Statistics reported Wednesday.

This was GBP 9.2 billion larger than in the same period last year and also marked the highest since records began in 1993.

Nonetheless, the surplus for January was lower than the Office for Budget Responsibility forecast of GBP 18.2 billion.

The budget balance usually log surplus in January due to receipts from self assessed taxes.

The ONS said the last time there was not a January surplus was 2021, during the pandemic period.

Central government receipts increased by GBP 3.9 billion to GBP 111.4 billion. Expenditure rose by GBP 1.6 billion to GBP 102.6 billion.

Data showed that borrowing in the financial year-to-January was GBP 96.6 billion, which was GBP 3.1 billion less than in the same ten-month period a year ago.

The OBR had projected a higher GBP 105.8 billion borrowing for the period.

At the end of January, public sector net debt was provisionally estimated at around 96.5 percent of gross domestic product.

Data came ahead of Chancellor Jeremy Hunt's Spring Budget announcement on March 16.

Despite the good news on public finances, this is unlikely to pave the way for a very big pre-election splash, Capital Economics economist Ruth Gregory said.

The Chancellor will be handed "headroom" of just GBP 15 billion, or 0.5 percent of GDP, limiting his ability to unveil big unfunded tax cuts if he wishes to adhere to the fiscal rules, Gregory added.