The UK has delivered a rare fiscal boost, recording its largest ever monthly budget surplus in January as tax revenues far exceeded expectations, offering welcome news for Chancellor Rachel Reeves ahead of the Spring Statement. Official figures from the Office for National Statistics show the government brought in £30.4 billion more than it spent, a record high for any month since records began in 1993 and significantly above the Office for Budget Responsibility’s forecast.
The surge in revenues was driven largely by strong self-assessment and capital gains tax receipts, while debt interest payments fell thanks to easing inflation and lower borrowing costs. For the first ten months of the 2025/26 financial year, total public borrowing stands at around £112 billion, notably below the forecasts published last autumn, suggesting the UK could undershoot its full-year borrowing projections.
Despite this good news, economists caution that the broader public finance picture remains challenging: total borrowing is still expected to be sizeable, and long-term debt levels remain high. The Spring Forecast in early March will reassess prospects, but January’s figures give the government a stronger platform to defend its fiscal approach
