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The British government’s coffers were given a small boost from rising tax receipts at the start of the year, helping the UK’s borrowing bill fall to its lowest January level in 17 years, but still disappointing forecasts.
In the last set of figures on the public finances ahead of next month’s annual Budget, the Office for National Statistics said public sector net borrowing last month, excluding taxpayer-backed banks, hit a surplus of £9.4bn in January, a rise of £300m from the same month last year.
It was the highest January surplus since 2000 and was boosted by a rise in self assessment tax receipts.
Although rising tax income was widely expected, the numbers are not as impressive as economists had expected. An average poll of analysts from Bloomberg showed the surplus was expected to hit £14.4bn in January.
Still, the Treasury welcomed the figures, saying the Government was “committed to returning the public finances to balance and building on our progress in reducing the deficit from 10 per cent to 4 per cent of GDP over the last six years.”
Overall net borrowing fell by £13.6bn in the year from last April to £49.3bn – the lowest figure since the financial crisis.
The UK’s borrowing bill measures the difference between revenue and spending.
Sam Tombs, economist at Pantheon, said that despite a smaller borrowing bill this year, it was unlikely that chancellor Philip Hammond would use much of the extra fiscal headroom to make big spending commitments in the March Budget.