[ad_1]
The government’s finances showed a large surplus last month, more than double the surplus in January last year.
The surplus, the difference between spending and tax revenue, rose to £16.7bn in January, according to the Office for National Statistics (ONS).
These are the last fiscal figures to be released before the Chancellor’s Budget in March.
Jeremy Hunt has hinted he wants tax cuts, which are expected to rise to the highest level in decades.
The government’s fiscal surplus could add fuel to next month’s tax cut debate.
But the surplus was lower than most economists expected.
This surplus is the result of increased tax revenues and decreased spending, for example because the government no longer subsidizes household utility bills.
According to the ONS, the government tends to collect more tax in January each year than it spends in other months, as self-assessed tax increases.
Furthermore, the cost of financing UK debt has also fallen as inflation has fallen.
Jessica Barnaby, deputy director general for the public sector at the ONS, said: “Despite an increase in spending on public services and benefits, overall spending was down on this time last year.”
Treasury Secretary Laura Trott said: “I won’t speculate on whether further tax cuts are possible in the Budget, but with inflation falling from over 11% to 4%, the economy is starting to turn the corner.”
Capital Economics, an economic think tank, suggested that the chancellor’s use of the surplus provided by the surplus to cut taxes would be “prioritizing election over prudence”.
In the year to April 2023, public borrowing totaled £96.6bn.
The UK’s overall debt is higher than a year ago, reaching around 96.5% of the size of the economy as measured by GDP, and remains at levels last seen in the early 1960s, the ONS said.
One of the government’s key commitments is to reduce the debt-to-GDP ratio within five years.
[ad_2]
Source link
