UK records historic £30.4 billion budget surplus in January
The UK government has recorded its largest ever monthly budget surplus, giving Chancellor Rachel Reeves an unexpected financial boost ahead of the spring statement. January's public sector net borrowing surplus reached £30.4 billion—the highest since records began in 1993.
The record surplus came as tax revenues hit an all-time high for the month, while debt interest payments dropped to their lowest level since March 2020. This decline in interest costs helped balance increased spending on public services and benefits.
Overall borrowing for the first 10 months of the financial year remains lower than the same period last year. January's surplus alone exceeded forecasts by £6.3 billion and was £15.9 billion higher than the same month in 2023.
Analysts noted that the strong performance was driven by robust tax receipts and reduced debt servicing costs. However, no specific details were available on why tax revenues surpassed expectations.
The unexpected surplus strengthens the government's fiscal position before the spring statement. With borrowing down year-on-year and debt interest payments at a near four-year low, the Treasury now has more flexibility in its financial planning. The figures suggest a more stable economic outlook heading into the next budget cycle.
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