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Government records smaller January budget surplus

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Rishi Sunak (left) has a lower budget surplus than expected to work with ahead of his March Budget
Chancellor Rishi Sunak (left) has a lower budget surplus than expected to work with ahead of his March Budget

The government recorded a smaller than expected budget surplus of £9.8bn in January, ahead of its public spending announcements due in March.

A Reuters poll of economists had predicted an £11.3bn surplus. And the £9.8bn figure was £2.1bn less than the Treasury recorded in January 2019 despite a rise in self-assessment tax receipts of £1.3bn. 

Airbus’ £843m fine also helped swell the Treasury’s coffers as the plane manufacturer paid out to settle a corruption probe.

Meanwhile, borrowing also rose £5.8bn year on year to £44.8bn for the current financial year to date.

The Office for Budget Responsibility (OBR) now predicts borrowing to rise to £47.6bn in the financial year ending March 2020.

“While the current fiscal rules, set by previous chancellor Sajid Javid, would still allow a large rise in public investment, the rise in the deficit makes the ambition of balancing the current budget deficit more restrictive,” Andrew Wishart, a UK economist at Capital Economics, said.

More to follow.