The UK public sector unexpectedly posted a surplus in January as resilient tax revenues offset the costs of the government’s energy support schemes, in the final set of public finance figures before next month’s budget.
The public sector registered a £5.4 billion (€6.1 billion) surplus last month, according to data published by the Office for National Statistics on Tuesday. That was lower than the surplus in the same month last year, but economists polled by Reuters had expected £7.8 billion of borrowing.
Self-assessed income tax receipts were £21.9 billion, which was the highest January figure since monthly records began in April 1999 and one-third higher than in January 2022.
Tax receipts in January tend to be higher than in other months because of the UK self-assessment deadline, often leading to a public sector net surplus.
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Last month’s tax receipts were partly offset by substantial spending on energy support schemes, said the ONS.
Spending on central government debt interest reached £6.7 billion, the highest January figure since monthly records began in April 1997.
In the financial year to January, the public sector borrowed £116.9 billion, £7 billion more than in the same period last year, reflecting the impact of the energy crisis on government spending and revenues.
However, that was £30.6 billion less than forecast in November by the Office for Budget Responsibility, the UK official watchdog.
Public sector debt, or borrowing accumulated over time, was 98.9 per cent of gross domestic product, a level last seen in the early 1960s.
Jeremy Hunt, the UK chancellor, said: “We are rightly spending billions now to support households and businesses with the impacts of rising prices, but with debt at the highest level since the 1960s, it is vital we stick to our plan to reduce debt over the medium term.” - Copyright The Financial Times Limited 2023
