UK witnesses record monthly budget surplus in Jan

Combined self-assessed income and capital gains tax receipts were worth £33 billion, £1.8 billion less than a year earlier.

Finance minister Jeremy Hunt will present his annual budget on March 6.

Borrowing in the fiscal year-to-January 2024 was £96.6 billion, £3.1 billion less than in the same ten-month period a year ago. This is the first time in the present fiscal that year-to-date borrowing has been lower than in the equivalent period in the last fiscal, partly because central government receipts have been revised.

Public sector net debt excluding public sector banks (debt) was £2,646.5 billion at the end of January this year and was provisionally estimated at around 96.5 per cent of the UK's annual gross domestic product (GDP). This is 1.8 percentage points higher than in January 2023 and remains at levels last seen in the early 1960s.

Excluding the Bank of England, debt was £2,417.6 billion, or around 88.1 per cent of the GDP, £228.9 billion (or 8.4 percentage points) lower than the wider measure.

Public sector net worth excluding public sector banks was in deficit by £677.5 billion at the end of January 2024; this compares with a £576.5 billion deficit at the end of January 2023.

“The Chancellor [Hunt] bags a record budget surplus in January as he eyes more fiscal easing” said Michal Stelmach, senior economist at KPMG UK.

“The latest set of data suggests that borrowing could end 2023-24 at £114 billion. We expect the OBR [Office of Budget Responsibility] to upgrade its fiscal outlook on the back of a weaker expected path for interest rates, lower spending on inflation-linked debt, as well as a possible upward revision to their net migration assumptions, which are net positive for the public finances. This could increase the headroom to meet the fiscal mandate to £21 billion, up from £13 billion at the Autumn Statement,” he added.

ALCHEMPro News Desk (DS)