UK public finances receive January surplus boost
Tuesday, 22 February 2011 12:41
In some unexpected good news for the beleaguered UK economy, tax receipts for January helped push down public sector borrowing by £5.25 billion.
The figures were helped by higher than expected tax receipts. However, the figures follow on from December which saw the highest ever figure for government borrowing.
January is traditionally a strong month for tax receipts as self assessment taxpayers pay their bills before the deadline at the end of the month. Tax receipts exceeded government spending by £3.7 billion in January and gave the largest surplus since July 2008.
The figures raise hopes that public borrowing for the year will be slightly lower than expected. With two months left of the financial year the figure is £8 billion less than expected. However, the deficit is still huge and one-off factors in the final few months mean that the figure will likely come in close to that which was predicted by the Office for Budget Responsibility (OBR) of £148 billion for the year.
The news defies forecasts from economists who expected an improvement on the figure from January 2010 of a surplus of £700 million but not the news released today that shows a surplus of over five times this amount.
According to the Office for National Statistics net debt excluding the temporary effects of financial interventions was £867.2 billion, equivalent to 57.6 per cent of gross domestic product.
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