FX.co ★ UK Posts Largest Budget Surplus on Record

The UK public sector, excluding public sector banks, posted a budget surplus of £30.4 billion in January 2026, more than double the £14.5 billion recorded a year earlier and well above market expectations of £23.8 billion. This was the largest monthly surplus since comparable records began in 1993. Total public sector receipts increased by £16.8 billion year-on-year, driven in particular by strong capital gains tax revenues, as companies and individuals accelerated asset disposals ahead of planned tax rises. January receipts are typically elevated due to self-assessed tax payments, and combined income tax and capital gains tax inflows reached a record level. On the spending side, public sector expenditure rose by £0.9 billion, with higher public service and welfare costs largely offset by reduced interest payments on government debt. For the financial year to January, cumulative borrowing stood at £112.1 billion, lower than the Office for Budget Responsibility’s £120.4 billion forecast, but still the fifth-highest borrowing figure for the April–January period on record.