“The expected boost from self-assessment tax receipts in January was not enough to bring the public finances under control, which will disappoint the Chancellor as she prepares for her first Spring Forecast.

“The latest numbers do not fundamentally change the weak state of the public finances nor the huge pressures on the Chancellor to increase public spending across the board, especially on defence given the situation in Ukraine.

“As these numbers will adversely affect the starting point for the Office for Budget Responsibility’s upcoming forecast, it may be more difficult for the Chancellor to keep to her commitment to hold only one fiscal event a year. Further tax rises in March are still unlikely, but their possibility has definitely increased.”

ENDS

Notes to editors:

1. The monthly surplus in January 2024 of £15.4bn was £0.8bn more than in the same month a year previously. It was £12.1bn below the budget of £27.5bn set in March 2024, and £5.1bn lower than the revised expectation of £20.5bn that was set at the time of the Autumn Budget 2024.
2. The cumulative deficit for the ten months to January 2025 of £118bn was £12bn more than for the same period in 2023/24. It was £45bn more than the budget set in March 2024 and £13bn higher than October’s revised forecast of £105bn.
3. January typically sees a boost to the public finances as self-assessment tax receipts are recognised, before returning to deficits in February and March. The OBR’s October forecast was for a cumulative deficit for the first ten months of the financial year of £105bn (net of a surplus of £20bn in January) and deficits of £6bn in February and £16bn in March to reach a total forecast deficit of £127bn for the full financial year.