UK ran a record £14.9 billion budget surplus in January

money £20 and coinsUK public finances hit a record surplus in January, according to official figures released by the Office for National Statistics on Thursday.

A surplus means that income generated from taxes exceeded the total amount of public spending.

The surplus in January 2018 was £14.9 billion, a record high for any month since record-keeping started in 1993. The figure was well above economists’ forecasts of £10 billion and £5.6 billion higher than January 2018.

A surplus is common in January as it’s when taxpayers submit their self-assessment returns.

Central government receipts in January 2019 rose 9.7% compared with January 2018, to £79.4 billion, while total central government expenditure rose by 3.0% to £62.2 billion.

The figures are the last snapshot of public finances before the mid-March Spring Statement when the Office for Budget Responsibility is set to update its forecasts. 

Howard Archer, chief economic adviser to the EY Item Club, was quoted by the BBC as saying:

“A record high surplus on the January public finances provides a much-needed welcome boost for Chancellor Philip Hammond as he faces a worrying backdrop to his Spring Statement on 13 March.

“With the economy clearly struggling early on in 2019 after a sharp slowdown in the fourth quarter of 2018 and the Brexit situation highly uncertain, the chancellor will have a lot on his mind when he presents the Spring Statement.

“It looks highly likely that he will have to announce downgraded growth forecasts from the OBR [Office for Budget Responsibility] at least for the near term, with possible negative ramifications for expected budget deficits.”