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UK Public Sector Records Highest-Ever January Surplus in 2026

In January 2026, the UK public sector recorded a £30.4 billion surplus — the highest for any January since records began in 1993 and more than double the surplus in January 2025.

Record January Surplus


  • The UK public sector achieved a £30.4 billion surplus in January 2026, £15.9 billion higher than January 2025 and £6.3 billion above the Office for Budget Responsibility’s (OBR) November 2025 forecast.
  • The surplus was primarily due to self-assessed Income and Capital Gains Tax receipts, which totaled £46.4 billion—£10.5 billion more than in January 2025.
  • January typically sees higher tax receipts due to self-assessment deadlines.


Borrowing and Debt


  • Borrowing for the financial year to January 2026 was £112.1 billion, 11.5% lower than the same 10-month period in 2025, but still the fifth-highest April-to-January borrowing on record.
  • Public sector net debt (excluding public sector banks) was 92.9% of GDP at the end of January 2026, unchanged from January 2025 and equivalent to levels last seen in the early 1960s.
  • Public sector net financial liabilities (a broader measure) were 82.4% of GDP, 10.5 percentage points lowerthan net debt.


Key Drivers


  • Tax receipts surged due to higher self-assessed taxes and changes in National Insurance contributions.
  • Central government spending in January 2026 was £86.1 billion, 0.7% lower than January 2025, with notable reductions in debt interest costs and grants paid abroad.
  • Local government borrowing for the financial year to January 2026 was £11.6 billion, slightly lower than the previous year.


Fiscal Context and Forecasts


  • The OBR’s November 2025 forecast projected borrowing of 4.5% of GDP for the full financial year ending March 2026.
  • The current budget deficit for the financial year to January 2026 was 3.7% of GDP, down from 4.4% in the same period last year.
  • The UK government’s fiscal targets aim to eliminate the current budget deficit and reduce public sector net financial liabilities relative to GDP by the financial year ending March 2030.


Revisions and Outlook


  • Recent revisions to GDP and borrowing estimates slightly improved the debt-to-GDP ratio, but the overall fiscal position remains challenging.
  • The next OBR forecast, due on 3 March 2026, will provide updated projections for the UK’s fiscal trajectory.