The UK government has recorded the first monthly budget surplus since the start of the coronavirus pandemic, despite a weaker than expected January performance as rising inflation pushed up debt interest costs, reports our economics correspondent Richard Partington.
The Office for National Statistics said public sector net borrowing, excluding the nationalized banks, was in surplus of £2.9bn last month, the first net positive month for the public finances since January 2020.
Although this was £5.4bn less than borrowed in January 2021, it was still a £7bn smaller surplus than in the same month in 2020 before the onset of Covid-19.
City economists had forecast a surplus of £3.5bn. January is typically a net positive month for the public finances due to the timing of self-assessed income tax payments.
Hinting at tough measures in the forthcoming budget next month, Rishi Sunak, the chancellor, said:
"We provided unprecedented support throughout the pandemic to protect families and businesses and it has worked, with the UK seeing the fastest economic growth in the G7 last year."
"But our debt has increased substantially and there are further pressures on the public finances, including from rising inflation."
"Keeping the public finances on a sustainable path is crucial so we can continue helping the British people when needed, without burdening future generations with high debt repayments."
National insurance is set to go up in April.