UK Government Surprises with January Budget Surplus: ONS

The UK government has announced that it ran an unexpected budget surplus in January, according to the Office for National Statistics (ONS). This is a rare occurrence and could provide some much-needed breathing space to finance minister Rishi Sunak as he prepares his annual budget.

The ONS reported that public sector net borrowing was £2.7 billion lower than expected in January, leaving the country with a small surplus of £700 million instead of the projected deficit of £2 billion. It marks only the second time since 2002-03 when there has been a monthly budget surplus – making this news even more remarkable.

This unexpected outcome can be attributed mainly to higher taxes on income and profits which were up by 8% compared with last year’s figure for January; while spending was down by 1%. The figures also showed that corporation tax receipts had risen significantly from 2019 levels due largely to companies paying their bills earlier than usual before new rules came into effect at the start of April 2020 requiring them to pay quarterly rather than annually.

While these figures are encouraging they do not necessarily mean there will be any extra money available for Mr. Sunak’s upcoming Budget announcement later this month – but it does give him more room for maneuver if he chooses to use it wisely!