UK government runs budget surplus in January

The UK government unexpectedly recorded a budget surplus in January as self-assessment income tax receipts surged, according to data released on Tuesday by the Office for National Statistics.

The Treasury recorded a surplus of £5.4bn borrowing, versus consensus expectations for a £7.8bn deficit. This was down £7.1bn compared to January 2022.

The Office for Budget Responsibility had been expecting a £0.4bn surplus.

Self-assessment income tax receipts hit a record of £21.9bn - the highest January figure since monthly records began in April 1999 and up £5.5bn on January 2022.

The figures also showed that interest on government debt reached £6.7bn in January, the highest amount for the month since records began in 1997.

Ruth Gregory, deputy chief UK economist at Capital Economics, said: "January’s public finances figures suggest the Chancellor may have scope for some giveaways in his Budget on 15th March.

"But with the OBR poised to slash its medium-term economic growth forecasts, any hopes the Chancellor might be able to give away a significant amount of money, while sticking to his previous debt-reduction plans, may be disappointed."