Self-assessed tax receipts are at the highest since records began, figures show.
Government spent less than it brought in creating a £5.4 billion surplus – but that’s a whopping £7.1 billion less than the previous January.
Debt interest payable hit £6.7 billion – the highest January figure since records began in 1997.
Danni Hewson, AJ Bell head of financial analysis, comments on the latest UK public sector finances: “In any other year a tax take of £21.9 billion would be cause for celebration. It’s a record haul as people filed their self-assessment returns after a year when Covid had finally been shown the door. The boon delivered the Treasury an unexpected gift, a month when the government actually spent less than it brought in, something most economists hadn’t seen coming.
“But January should be a month that sets the country’s finances up for the new year and when you compare the surplus with that generated last year, despite an increase in tax receipts, the picture doesn’t look quite so rosy and doesn’t bode well for anyone hoping to see a few a rabbits jump out of Jeremey Hunt’s hat next month.
“Inflation has sent interest payments on all that government debt shooting up to another record high for the month and the cost of keeping household energy payments at a vaguely reasonable level has also gnawed away at those receipts.
“CPI might be falling gradually, and that energy guarantee is already set to become less generous in April, but the landscape is still pretty rocky for a Chancellor looking to rebuild the country’s credibility with financial markets.
“Although things are changing, just look at the difference between the OBR’s November forecast and the surplus delivered in January. Look at falling gas prices which look set to render the government’s scheme obsolete.
“The big question is how will the OBR view the country’s economic prospects at a time when recession has been narrowly avoided so far, but strike action, rate hikes and stubbornly sticky inflation are continuing to take a toll.”