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Record-breaking budget surplus as government's tax income rises
More money than ever has been left over in the public finances due to more tax being paid, official figures show.
January had the biggest budget surplus since records began in 1993, according to data from the Office for National Statistics (ONS). It meant the government received more money than it spent last month, leaving £30.4bn left over.
Money blog: Every Michelin-starred restaurant with a less than £50 meal It's £15.9bn more than the surplus in January 2025, although the figures are not adjusted for inflation. The surplus is even higher than anticipated by independent forecasters the Office for Budget Responsibility (OBR) - about £6.3bn bigger.
Why? While there was little change in government spending, the highest-ever recorded surplus resulted from revenue being "strongly up" and lower interest rates, the ONS said. Self-assessed tax revenues were nearly £6bn more than planned for and capital gains tax receipts surged.
Lower interest rates have meant borrowing money cost less. The cost of borrowing was £1.5bn in the month, £5bn lower than the time last year.
A relief for Reeves It's been described as a "welcome relief" and "good news" for Chancellor Rachel Reeves by analysts from Big Four accounting firm PWC and economic research firm Pantheon Macroeconomics. "This decline eases immediate pressure on the public finances.
Amir Nisi
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