Bumper surplus on the back of strong tax receipts points to Spring forecast being a ‘non-event’

The Government ran a record monthly surplus in January 2026 – nearly double that of last year – as Self-Assessment tax receipts surprised to the upside. But while there is no public-finances imperative for the Chancellor to change policy at the Spring forecast, economic policy should not just ‘clock off’ until the Budget – according to the Resolution Foundation today (Friday).

The latest ONS data shows the Government had a budget surplus of £30.4 billion in January, £15.9 billion higher than last year and the largest cash surplus in nominal terms since monthly records began in 1993. This means the Government has borrowed £112.1 billion in the fiscal year to date (2025-26), £8.3 billion less than the OBR’s November 2025 forecast.

In January 2026, SA Income Tax receipts were provisionally estimated at £29.4 billion, £3.6 billion more than in January 2025, and £1.8 billion more than forecast by the OBR at the Budget. Although January data is always relatively uncertain, reflecting the timing of tax payments between this month and next, today’s data are encouraging and are consistent with the public finances outperforming the OBR’s November forecast.

Excluding Self-Assessment, cash receipts are also running £3.4 billion above the OBR’s forecast in the year to January – suggesting tax revenue is performing reasonably well despite growth and inflation underperforming the OBR’s forecast.

This, combined with lower-than-expected spending, suggests that there is no public-finance imperative for the Chancellor to change policy at the forthcoming Spring Forecast, meaning it is likely to be a ‘non-event’.

But this does not mean that economic policy should simply down tools until the Budget in the autumn. Instead, the Government should double-down on efforts to boost growth and respond to a weakening labour market.

James Smith, Chief Economist at the Resolution Foundation, said:
“Tax receipts usually boost the public finances in January as people rush their tax returns ahead of the deadline. But, this year appears to have been a bumper year, leaving borrowing significantly lower than forecast by the OBR.

“With borrowing now running £8.3 billion below the OBR’s forecast for the fiscal year to date, the Spring Forecast looks set to be a fiscal non-event. While that is understandable given high policy uncertainty, the Government should not wait to double down on efforts to boost growth and respond to a weakening labour market.”