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Britain’s Chancellor of the Exchequer Jeremy Hunt stands holding the dispatch box with Treasury colleagues outside 11 Downing Street in London, Britain.
Bloomberg | Bloomberg | getty images
LONDON – Britain posted a record £16.7 billion ($21.1 billion) net budget surplus in January, according to official figures released on Wednesday.
The Office for National Statistics noted that unlike other months, the country’s public finances generally remained in surplus in January, due to receipts from self-assessed annual income tax payments.
The ONS said combined self-assessment income and capital gains tax receipts were £33 billion in January, down £1.8 billion from the same period last year.
Total government tax receipts stood at a record £90.8 billion, £2.9 billion more than in January 2023.
Government borrowing during the fiscal year spanning the end of January 2024 was £96.6 billion, £3.1 billion less than the same 10-month period a year earlier and £9.2 billion less than the £105.8 billion previously estimated by the Independent Office Was. Budget responsibility.
The ONS highlighted that public debt was forecast to be around 96.5% of annual GDP, up 1.8 percentage points from January 2023 and on levels seen in the early 1960s.
Laura Trott, the government’s chief secretary to the treasury, said in a statement: “We have made significant gains in the past few months to pay wages, support businesses and protect lives during Covid, and to pay half of people’s energy bills following Putin’s invasion of Ukraine. Provided hundreds of billions of dollars.”
“But we cannot leave future generations to bear the burden, which is why we have taken tough decisions to help reduce borrowing earlier than the OBR expected in March.”
Wednesday’s figures mark the final set of public finance data before Finance Minister Jeremy Hunt presents his spring budget on March 6, which outlines the government’s fiscal policy for the year.
With the main opposition Labor Party leading by more than 20 points in the general election and elections due before the end of January 2025, there is much speculation over whether Hunt will try to find a way to pass tax cuts next month. do.
Lindsay James, investment strategist at Quilter Investors, said: “Recent UK by-election results show the Labor Party is in the ascendancy as we head towards a general election, putting pressure on Hunt to offer tax cuts. will be.”
“However, with their hands largely tied by the country’s financial situation, investors must be realistic about the prospects for its extension, or prepare for further drastic cuts to Britain’s already strained public services. should remain.”
Despite a record surplus in January, weaker than expected self-assessed receipts meant the figure was actually slightly lower than forecast by the OBR in November.
However, Hunt will be relieved by a decline in borrowing figures in the first 10 months of the financial year, according to Martin Miklos, research economist at the Institute for Fiscal Studies.
“While lower borrowing over the past ten months is welcome news, as the OBR prepares a new set of forecasts for the upcoming March Budget, even more important will be what decisions they make on the outlook for growth and inflation,” Miklos said. Will take.”
“With the pressure on public services to offset some of the record-breaking tax growth seen since 2019, and the need for a credible plan to get the debt on track to fall, the Chancellor’s forthcoming Budget It won’t be easy.”
