Government accounts showed an unprecedented monthly surplus in January after tax revenues comfortably outstripped spending. The Office for National Statistics (ONS) reported a surplus of £30.4bn, the largest for any single month since comparable records began in 1993. The figure, published ahead of the 3 March Spring Statement, was well above economists’ forecasts of £23.8bn and significantly higher than the £15.4bn recorded a year earlier.

January is typically a strong month for the public finances because self-assessment income tax payments fall due. This year’s total was further boosted by a sharp rise in capital gains tax receipts. Over the financial year to date, borrowing reached £112.1bn, around 11.5% lower than the same period last year, though still among the highest totals on record for the first ten months of a financial year.

Retail sales also surprised on the upside. The volume of goods purchased increased by 1.8% in January, compared with expectations of a modest 0.2% rise. Demand for sports nutrition products, jewellery, artwork and antiques contributed to the stronger-than-anticipated performance.

Ministers said borrowing is projected to fall to its lowest level since before the pandemic, with plans to cut it further by the end of the decade. However, critics argued that high taxes and rising national debt remain concerns. The UK’s debt-to-GDP ratio stood at 92.9% at the end of January, levels not seen since the early 1960s.