UK Public Surplus Widens in January

Public sector net borrowing in the UK, excluding public sector banks, recorded a £30.4 billion surplus in January 2026, more than doubling from £14.5 billion a year earlier and exceeding expectations of £23.8 billion. This marked the largest budget surplus since records began in 1993, as total public sector receipts rose by £16.8 billion year-on-year, supported by strong capital gains tax inflows after companies and individuals brought forward asset sales ahead of planned tax increases. January receipts are typically elevated due to self-assessed payments, with combined income and capital gains tax revenues reaching a record high. Meanwhile, public sector expenditure increased by £0.9 billion, as higher public service and benefit costs were largely offset by lower interest payments on government debt. For the financial year to January, borrowing totaled £112.1 billion, below the OBR’s £120.4 billion forecast, though still the fifth-highest April–January borrowing on record.

UK public sector net borrowing (excluding public sector banks) fell to £11.6 billion in December 2025 from £18.7 billion a year earlier, coming in lower than expectations of £14.0 billion. Total public sector receipts increased by £8.2 billion year-on-year, led by nearly 10% annual growth in central government tax and National Insurance contributions, the highest December level on record. Meanwhile, public sector expenditure rose by £1.1 billion compared with a year earlier, reflecting higher spending on public services, social benefits, and debt interest, which were partially offset by a reduction in payments to the rest of the world. For the financial year to December, borrowing totaled £140.4 billion, down £0.3 billion (0.2%) from the same nine-month period in 2024, though still marking the third-highest April–December borrowing on record. Public sector net debt, excluding public sector banks, stood at around 95.5% of GDP, remaining close to historically elevated levels.

UK public sector net borrowing (excluding public sector banks) narrowed to £11.7 billion in November 2025, down from £13.6 billion a year earlier, but above market expectations of £10 billion. Total public sector receipts increased by £5.9 billion year-on-year, supported by higher central government tax revenues and National Insurance contributions. Meanwhile, total public sector expenditure rose by £4.0 billion, reflecting increased spending on public services and social benefits, while debt interest costs declined compared with last year amid easing inflation-linked payments. For the financial year to November, borrowing reached £132.3 billion, up £10.0 billion, or 8.2%, from the same eight-month period of 2024, marking the second-highest April-to-November borrowing on record after 2020. Public sector net debt, excluding public sector banks, stood at around 95.6% of GDP, remaining close to historically elevated levels.