Britain’s government ran a record budget surplus of 15.4 billion pounds ($19.5 billion) last month, official figures showed on Friday, but in a setback for finance minister Rachel Reeves it was well below economists’ and officials’ expectations.
Britain’s public finances typically show a surplus in January when annual income tax bills for the previous financial year fall due for many taxpayers.
However, cumulative borrowing for the first 10 months of the financial year totalled 118.2 billion pounds, the Office for National Statistics said.
That is 11.6 billion pounds more than at the same point of the 2023-24 year and above the 105.4 billion pounds which the Office for Budget Responsibility forecast in October for this point in the financial year.
The OBR expected a 20.5 billion-pound surplus for January.
The figures come after a number of economists estimated that Reeves risks missing her debt reduction goals when the government’s forecasters publish updated borrowing estimates on March 26.
Reeves’ first budget last year left her with only 9.9 billion pounds of headroom to meet a target of balancing day-to-day spending and tax revenues by the 2029-30 financial year, despite announcing Britain’s biggest tax rises in decades.
Since the budget, government borrowing costs have risen globally and British business sentiment and growth prospects have weakened, reflecting Reeves’ 40 billion-pound tax rise and uncertainty created by trade tariffs announced by U.S. President Donald Trump.
Public sector net debt excluding public sector banks totalled 95.3% of annual gross domestic product in January, 0.1 percentage points higher than a year earlier and around levels last seen in the early 1960s, the ONS said.
Public sector net financial liabilities – a measure targeted by Reeves which includes illiquid assets – stood at 82.7% of GDP in January, up 2.0 percentage points on the year.
($1 = 0.7891 pounds)
(Reporting by David Milliken）
