Wiggle room for Chancellor Jeremy Hunt

Britain’s Chancellor Jeremy Hunt has a £9.2 billion (€10.7 billion) surplus to play with for his March 6 pre-election Budget.

During the first 10 months of the government’s financial year, which ends on March 31, borrowing amounted to £96.6 billion (€112.8 billion), the Office for National Statistics (ONS) revealed.

This was below the expectations of the tax and spending regulator, the Office for Budget Responsibility (OBR), which anticipated government borrowing of £105.8 billion (€123.6 billion) at this stage.

The record figure was boosted by a £16.7 billion (€19.5 billion) surplus in January, which is the month when British taxpayers file their returns and was also helped by lower interest payments on government debt.  This was more than twice January 2023’s £7.5 billion (€8,7 billion) surplus.

Nevertheless, financial markets had foreseen an £18.7 billion (€21.8 billion) surplus.

Jessica Barnaby, deputy director of the ONS’ Public Sector division revealed that “in nominal terms” the January surplus was the greatest since modern records began in 1993. although borrowing in the 10 months ending in January 2024 was only marginally lower than during the same period in 2023.

Falling inflation measured by the retail prices index resulted in lower payments to those holding government bonds, Barnaby added, while an end to last year’s support for energy bills also reduced state spending.

National debt as a share of the economy had continued to increase and represented 96.7 per cent of Britain’s gross product (GDP) in January, an increase of 1.8 percentage points on January 2023, the ONS said.