Britain's public finances recorded a record surplus in January, official data showed on Wednesday, raising talk of offering voter-friendly perks to ease recession blues in next month's pre-election budget.
The national statistics authority said in a statement that the public sector had a net borrowing surplus of 16.7 billion pounds ($21.1 billion) last month.
This was the biggest surplus since monthly records began in 1993 and more than double the £7.5bn surplus for the same month in 2023, the ONS added.
The data sparked fresh speculation that Chancellor Rishi Sunak's Conservative government could cut taxes in Chancellor of the Exchequer Jeremy Hunt's Budget on March 6.
But analysts warned that the benefits could be limited after last month's surplus was lower than market expectations of 18.5 billion pounds.
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The British government traditionally runs a surplus in the first month of the year, as Britons pay their taxes each year.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “January's financial numbers were mixed news for Jeremy Hunt. Jeremy Hunt was financially comfortable but… “It wasn't big enough to make a lot of money in the budget.”
“Mr. Hunt has a few inches of headroom, but not enough for a dramatic tax cut budget. But he has a chance to make some moves.”
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Sunak's Conservative Party and Keir Starmer's main opposition Labor Party are jockeying for position ahead of this year's general election.
But the outlook darkened last week after official figures showed the UK economy would contract in the last two quarters of 2023, pushing the country into recession.
The news comes after data showed UK inflation remained at 4.0% in January, prolonging the cost of living crisis for millions of Britons.
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And in a further blow, Mr Sunak's Conservative Party lost two more elections to Labor in Friday's by-election.
The ONS added on Wednesday that Britain's total debt rose to £2.65 trillion (96.5% of GDP) in January, the highest level since the early 1960s.
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