It’s \u00a315.9bn more than the surplus in January 2025, although the figures are not adjusted for inflation.<\/p>\n
The surplus is even higher than anticipated by independent forecasters the Office for Budget Responsibility (OBR) – about \u00a36.3bn bigger.<\/p>\n
Why?<\/p>\n
While there was little change in government spending, the highest-ever recorded surplus resulted from revenue being “strongly up” and lower interest rates, the ONS said.<\/p>\n
Self-assessed tax revenues were nearly \u00a36bn more than planned for and capital gains tax receipts surged.<\/p>\n
Lower interest rates have meant borrowing money cost less.<\/p>\n
The cost of borrowing was \u00a31.5bn in the month, \u00a35bn lower than the time last year.<\/p>\n
A relief for Reeves<\/p>\n
It’s been described as a “welcome relief” and “good news” for Chancellor Rachel Reeves by analysts from Big Four accounting firm PWC and economic research firm Pantheon Macroeconomics.<\/p>\n
“This decline eases immediate pressure on the public finances”, PWC’s economist Nabil Taleb said.<\/p>\n
Paying more on debt can mean public finances are more exposed to economic shocks.<\/p>\n
But the path ahead is not without hazards for Ms Reeves.<\/p>\n
![\"\"](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/02\/skynews-ed-conway-unemployment_7167589.jpg\")
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Share<\/p>\n
\n Youth unemployment at its highest rate in 11 years\n <\/p>\n
The room she has to spend money before breaking her self-imposed fiscal rules – to bring down government debt and balance the budget by 2030 – has narrowed since the November budget.<\/p>\n
Lower gross domestic product readings, a key economic measure, may already have eroded the sums Ms Reeves has to spend before breaking her fiscal rules.<\/p>\n
Anaemic economic growth<\/a> and a rising unemployment rate<\/a> could mean tax takes stall.<\/p>\n And the January tax revenue figures could be a one-off.<\/p>\n The month is key for the exchequer because of the influx of self-assessed income tax receipts.<\/p>\n Further evidence economy ‘picked up smartly’<\/p>\n Good news for the economy also came in the form of retail sales, which recorded a far better than expected January.<\/p>\n The total volume of retail sales, which measures the quantity bought, increased by 1.8% last month, the ONS said.<\/p>\n It was the largest increase since May 2024.<\/p>\n There continued to be “strong” sales at online jewellers as they reported “demand had hit unprecedented levels”, the ONS added.<\/p>\n Also selling well were works of art, furniture and technology,<\/p>\n This data gave “further evidence that economic growth picked up smartly in the New Year as budget uncertainty fades”, Pantheon’s chief UK economist Rob Wood said.<\/p>\n