UK posts largest ever budget surplus of £30.4bn in January
Newsflash: The UK government has racked up a record-breaking budget surplus in January.
Britain’s public sector was £30.4bn in surplus last month, the Office for National Statistics reports, beating expectations of a surplus of around £24bn.
That’s double the surplus recorded in January – traditionally a strong month due to self-assessment tax bills – and is the highest surplus since monthly records began in 1993.
It’s a clear boost for the chancellor, Rachel Reeves, in the run-up to her spring statement next month,
The public sector (excluding public sector banks) was £30.4 billion in surplus in January 2026.
This was £15.9 billion more than in January 2025 and was the highest surplus since monthly records began in 1993 (not adjusted for inflation).
Read more ➡️ https://t.co/bvKpcgAoLr pic.twitter.com/cf1itbvgrS
— Office for National Statistics (ONS) (@ONS) February 20, 2026
ONS chief economist Grant Fitzner says:
“January – which is traditionally a strong month for self-assessed tax receipts – saw the highest surplus since monthly records began.
“Revenue was strongly up on the same time last year, while spending was little changed, due to lower debt interest payments largely offsetting higher costs on public services and benefits.
“Across the first ten months of the current financial year, borrowing is lower than the same period a year ago.”
Key events
UK retail sales smash forecasts
The latest retail sales figure are rather stronger than expected too!
British retail sales rose by 1.8% on a monthly basis in January, the ONS reports, smashing forecasts of a 0.2% rise. That’s the largest monthly rise since May 2024.
On an annual basis, retail sales volumes were 4.5% higher, again higher than forecast.
The ONS reports that growth in January 2026 was partly because of artwork and antiques sales, alongside continued strong sales from online jewellers.
However, over the last three months retail sales were only up by 0.1%, compared with the previous quarter (due to a fall of 0.4% in November).
Here’s ONS chief economist Grant Fitzner to explain:
“Retail sales rose slightly in the latest three months, as sales continued to pick up in the new year following a weak November.
“Motor fuel sales increased a little across the period, while sales of art works, tech retailers and furniture stores also performed well. These were partially offset by falls in supermarket sales.”
UK posts largest ever budget surplus of £30.4bn in January
Newsflash: The UK government has racked up a record-breaking budget surplus in January.
Britain’s public sector was £30.4bn in surplus last month, the Office for National Statistics reports, beating expectations of a surplus of around £24bn.
That’s double the surplus recorded in January – traditionally a strong month due to self-assessment tax bills – and is the highest surplus since monthly records began in 1993.
It’s a clear boost for the chancellor, Rachel Reeves, in the run-up to her spring statement next month,
The public sector (excluding public sector banks) was £30.4 billion in surplus in January 2026.
This was £15.9 billion more than in January 2025 and was the highest surplus since monthly records began in 1993 (not adjusted for inflation).
Read more ➡️ https://t.co/bvKpcgAoLr pic.twitter.com/cf1itbvgrS
— Office for National Statistics (ONS) (@ONS) February 20, 2026
ONS chief economist Grant Fitzner says:
“January – which is traditionally a strong month for self-assessed tax receipts – saw the highest surplus since monthly records began.
“Revenue was strongly up on the same time last year, while spending was little changed, due to lower debt interest payments largely offsetting higher costs on public services and benefits.
“Across the first ten months of the current financial year, borrowing is lower than the same period a year ago.”
Introduction: Public finances and retail sales coming up…
Good morning. We’re about to get a new healthcheck on the British economy, with the latest public finances and retail sales data.
Economists predict that January was a bumper month for the public finances, as people rushed to pay self-assessment tax bills before the deadline at the end of the month.
The City expects January’s surplus could come in at a whopping £23.8bn, as the public sector received more in taxes and other income than it spent. That would be a record for any January – a welcome boost for the chancellor ahead of next month’s Spring economic forecasts.
Retail spending may have slowed in January, though. Economists predict monthly growth of just 0.2%, down from 0.4% in December, although the annual pace could pick up to 2.8% from 2.5%.
The agenda
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7am GMT: UK retail sales for January
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7am GMT: UK public finances for January
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9am GMT: Eurozone flash PMI report
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9.30am GMT: UK flash PMI report
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1.30pm GMT: US GDP report for Q4 2025
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2.45pm GMT: US flash PMI report
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3pm GMT: University of Michigan’s consumer sentiment index for February