The Office for National Statistics (ONS) has released data showing that the UK public finances recorded a surplus of £30.4 billion in January 2026. This is the highest monthly surplus since records began in 1993 and a stark contrast to the £11.6 billion deficit recorded in December of last year.
The surplus was significantly higher than expected: economists had forecast an average of £23.8 billion, while the Office for Budget Responsibility (OBR) forecast was around £24 billion. January traditionally sees higher revenues due to the deadline for paying self-assessed taxes, including income tax and capital gains tax.
According to preliminary ONS estimates, combined revenue from self-assessed income tax and capital gains tax in January reached £46.4 billion—£10.5 billion more than the previous year. Lower-than-expected debt servicing payments also contributed to the result.
For Chancellor of the Exchequer Rachel Reeves, these figures came as a surprise and temporary boost just two weeks before her Spring Statement on March 3. Following criticism of her fiscal rules and pressure on budget constraints, the record surplus gives the government more room to maneuver—whether that means easing austerity measures, boosting investment, or cutting taxes.
“This is a strong signal that the economy is performing better than many expected,” commented one economist. “But it’s important to remember: the January surplus is seasonal, and the cumulative deficit for April–January remains high at £112.1 billion, albeit 11.5% lower than a year ago.”
Public sector net debt (excluding banks) was estimated at 92.9% of GDP at the end of January—a level last seen in the early 1960s.
Experts note that the record-breaking January doesn’t change the overall picture: the government still faces the need to balance compliance with fiscal rules, increased defense and healthcare spending, and promises to reduce the tax burden for working families.