UK Budget Logs Surplus In January

The UK budget logged its first surplus since the start of the pandemic, the Office for National Statistics said on Tuesday.

Public sector net borrowing excluding public sector banks showed a surplus of GBP 2.9 billion in January, which was GBP 5.4 billion less borrowing than in January 2021.

Nonetheless, this was still a GBP 7.0 billion smaller surplus than in January 2020, before the coronavirus pandemic.

In January, current receipts grew 10.4 percent annually, while the expenditure rose only 2.7 percent.

In the financial year-to-January 2022, PSNB excluding banks was GBP 138.5 billion, the second-highest financial year-to-January borrowing since monthly records began in 1993.

This was GBP 17.7 billion less than the official Office for Budget Responsibility forecast.

Even though higher interest costs will eat into that cushion in February and March, the extent of the undershoot so far means cumulative borrowing will probably finish this fiscal year at GBP 175 billion, below the OBR’s forecast of GBP 183billion, Bethany Beckett, an economist at Capital Economics, said.

Further, data showed that public sector net debt excluding public sector banks was GBP 2,317.6 billion at the end of January, or around 94.9 percent of gross domestic product.

The extra funding required by government coronavirus support schemes, combined with reduced cash receipts and a fall in GDP, helped to push public sector net debt at the end of January 2022 to the highest level last seen in the early 1960s.

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