The pressure on Britain's creaking public finances eased today as a bumper tax haul in January saw the Government record the highest monthly borrowing surplus in more than two years.
Public sector net borrowing, excluding financial interventions by the Government, showed a surplus of £3.7 billion sterling last month, a marked improvement on last year's deficit of £1.3 billion, the Office for National Statistics (ONS) said.
January traditionally shows net repayments, as the deadline for the payment of self-assessment income and capital gains tax and corporation tax falls at the end of the month, but this was still the largest surplus since July 2008, the ONS said.
Today's figures will ease fears that borrowing is in danger of overshooting forecasts set by the tax and spending watchdog, the Office for Budget Responsibility (OBR). They could add weight to arguments against the size of the coalition's package of austerity measures, which includes £81 billion-worth of spending cuts.
The figures come after US Treasury Secretary Timothy Geithner gave his backing to Chancellor George's Osborne plans to reduce the budget deficit. Mr Geithner said he was 'very impressed' with the deficit reduction plan, and added that the UK had to make cuts far quicker than the US.
Total public borrowing for the year to date now stands at £113 billion, the ONS said, £14.1 billion lower than the same time in the previous financial year. Total UK tax receipts increased by 12.4% in January, the ONS said, the largest increase since last April.
Income and capital gains tax receipts increased by 18.9% to £23.7 billion, a six-year high. Receipts for VAT, which was increased from 17.5% to 20% last month, rose by 8.4%, but this compared to January 2010 when there was also a VAT hike.
