UK public finances show record surplus in January

[LONDON] Britain’s public finances showed a record monthly surplus of £30.4 billion (S$52 billion) in January, official figures showed on Friday (Feb 20) in a boost for Finance Minister Rachel Reeves ahead of a fiscal update on Mar 3.

Economists polled by Reuters had a median forecast of a £23.8 billion surplus for the month, which typically brings strong inflows of revenue for the government as annual income tax bills fall due.

Since the start of the financial year in April 2025, British public borrowing totalled £112.1 billion, the Office for National Statistics said, down by 11.5 per cent from the first 10 months of FY2025.

This total is below the forecast of £120.4 billion at this point in the financial year from the Office for Budget Responsibility (OBR), which predicts a total deficit of £138.3 billion or 4.5 per cent of national income for FY2026.

At the start of the financial year, the OBR had forecast that the government would be able to reduce borrowing to 3.9 per cent of gross domestic product.

The OBR is due to release new growth and borrowing forecasts on Mar 3, when Reeves hopes the greater fiscal headroom she created in November’s annual Budget will be enough – unlike in 2025 – to avoid needing to make a mid-year change in fiscal policy.

SEE ALSO

UK inflation hits its lowest in nearly a year at 3%

UK police arrest King Charles’ brother Andrew: BBC

UK residential land prices may have bottomed: Knight Frank

DECODING ASIA

Navigate Asia in
a new global order

Get the insights delivered to your inbox.

The finance minister has that said she wants to hold only one major fiscal event a year.

From 2026, the OBR will not formally judge if the government is on track to meet its goals at the mid-year assessment that usually takes place in March.

Britain’s government aims to stop funding day-to-day public spending with borrowing by FY2030. REUTERS