Income boosts UK January public finances

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Income boosts UK January public finances

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Strong income tax receipts helped Britain to a bigger-than-expected surplus in its public finances in January.

It was the first surplus in two years and puts the UK government on track to meet its borrowing target for the current financial year

However, economists said it will be difficult for the government to reduce borrowing to meet its targets for the new financial year starting in April.

The UK Office for National Statistics said that on the public sector net borrowing measure including financial sector interventions, Britain ran a surplus of 5.252 billion pounds (6.52 billion euros) in January, a month when many annual and quarterly tax payments are due from companies and individuals.

This was well above economists’ forecasts of an increase to 700 million pounds from January 2010’s meagre surplus of just 95 million pounds

A British Treasury spokesman acknowledged the size of the task ahead. He said: “It will take more than one month in surplus to deal with borrowing of almost 150 billion pounds for the financial year.”

“The Government is determined to stay the course to deal with this unsustainable borrowing, and keep Britain out of the financial danger zone,” the spokesman added.