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Feb 24, 2022

First budget surplus during COVID-19 pandemic

The UK's labour market recovery brought in higher-than-expected tax revenues in January 2022, bringing public finances into the black for the first time during the COVID-19 crisis.

Data from the Office for National Statistics showed that strong tax receipts meant public sector borrowing excluding public sector banks was a surplus of £2.9bn last month.

Central Government receipts were £91.6bn, while expenditure totalled £76.3bn.

Meanwhile, tax receipts for April 2021 to January 2022 totalled £597.6 billion, figures from HMRC show.

This is £124.8bn (131%) higher than in the same period a year earlier when the UK faced stringent lockdowns and social restrictions.

James Smith, research director at the Resolution Foundation, said:

"Britain's Omicron-defying labour market recovery is benefitting both workers and the Chancellor, with tax receipts this year so far over £25 billion higher than forecast by the OBR last Autumn.

"The warning in an otherwise welcome set of figures is the £6.1 billion increase in debt repayments stemming from higher inflation.

"As a result, the state actually spent more this January than during the lockdown last year."

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