London Daily

Focus on the big picture.
Saturday, Jul 19, 2025

Jeremy Hunt to 'stick to plan' despite £30bn less borrowing in year to date than predicted

Jeremy Hunt to 'stick to plan' despite £30bn less borrowing in year to date than predicted

The chancellor suggests his budget next month will not contain significant giveaways as the latest borrowing data shows strong income tax receipts and lower than expected spending on energy support has helped ease some pressure.
Public borrowing in the financial year to date is £30.6bn less than predicted by the Office for Budget Responsibility (OBR), according to the last set of official figures before next month's budget.

The Office for National Statistics (ONS) reported a £5.4bn surplus for the chancellor in January - aided by the highest January figure for self-assessment income tax receipts since monthly records began in 1999 of £21.9bn.

A poll of economists by the Reuters news agency had forecast a net borrowing figure of almost £8bn.

January's surplus, however, took the level of borrowing in the 2022/23 financial year so far to £116.9bn, the number-crunchers reported.

While the sum is well down on what the OBR forecast at the time of the autumn statement, the government has consistently argued that now is not the time to splash the cash despite the headwinds from the cost of living crisis.

It has cited the cost of energy bill support for households and businesses on the back of the COVID era aid that saw borrowing hit record levels.

Jeremy Hunt, however, is under pressure from critics to find more money for the NHS, fund higher public sector pay settlements in the face of widespread strikes and extend the current level of the energy support scheme beyond March.

Tory backbenchers are particularly keen for the tax burden to fall as the party languishes behind Labour in the polls.

But there was no change in tone from Mr Hunt in his response to the ONS figures.

"We are rightly spending billions now to support households and businesses with the impacts of rising prices - but with debt at the highest level since the 1960s, it is vital we stick to our plan to reduce debt over the medium-term", the chancellor said in a statement.

"Getting debt down will require some tough choices, but it is crucial to reduce the amount spent on debt interest so we can protect our public services."

The ONS data showed that public sector net debt stood at almost £2.5trn.

The impact of inflation on the cost of servicing government debt also remained clear to see at £6.7bn in January alone.

It was the highest figure for that month since records began in 1997.

Financial experts said that the boost from income tax receipts in January was exacerbated by energy costs coming in lower than predicted.

Economists at KPMG estimated that the Energy Price Guarantee was now likely to cost only around half of the OBR's £12.8bn forecast in 2023-24, thanks to lower wholesale energy prices.

"However, this will be largely offset by the new Energy Bills Discount Scheme for businesses, with an estimated cost of £5.5bn, providing little near-term relief against a backdrop of wider spending pressures," they said.

Economist Ruth Gregory at Capital Economics said of the report: "January's public finances figures suggest the chancellor may have scope for some giveaways in his budget on 15th March.

"But with the OBR poised to slash its medium-term economic growth forecasts, any hopes the chancellor might be able to give away a significant amount of money, while sticking to his previous debt-reduction plans, may be disappointed."

There was further evidence later on Tuesday morning that the economy is performing better than many, including the International Monetary Fund, expected.

A closely-watched reading of activity in the services and manufacturing sectors both outperformed economists' forecasts.

The preliminary "flash" reading of the S&P Global/CIPS UK Composite Purchasing Managers' Index (PMI) jumped to 53.0 in February from 48.5 in January, above the 50 threshold for growth for the first time since July.

The authors said businesses reported a bounce this month, as well as receding price pressures.
Newsletter

Related Articles

0:00
0:00
Close
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
SpaceX Nears $400 Billion Valuation With New Share Sale
Microsoft, US Lab to Use AI for Faster Nuclear Plant Licensing
Trump Walks Back Talk of Firing Fed Chair Jerome Powell
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Irish Tech Worker Detained 100 days by US Authorities for Overstaying Visa
Dimon Warns on Fed Independence as Trump Administration Eyes Powell’s Succession
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Jeff Bezos Considers Purchasing Condé Nast as a Wedding Gift
Ghislaine Maxwell Says She’s Ready to Testify Before Congress on Epstein’s Criminal Empire
Bal des Pompiers: A Celebration of Community and Firefighter Culture in France
FBI Chief Kash Patel Denies Resignation Speculations Amid Epstein List Controversy
Air India Pilot’s Mental Health Records Under Scrutiny
Google Secures Windsurf AI Coding Team in $2.4 Billion Licence Deal
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
South African Police Minister Suspended Amid Organised Crime Allegations
Nvidia CEO Claims Chinese Military Reluctance to Use US AI Technology
Hong Kong Advances Digital Asset Strategy to Address Economic Challenges
Australia Rules Out Pre‑commitment of Troops, Reinforces Defence Posture Amid US‑China Tensions
Martha Wells Says Humanity Still Far from True Artificial Intelligence
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
U.S. Resumes Deportations to Third Countries After Supreme Court Ruling
Excavation Begins at Site of Mass Grave for Children at Former Irish Institution
Iranian President Reportedly Injured During Israeli Strike on Secret Facility
EU Delays Retaliatory Tariffs Amid New U.S. Threats on Imports
Trump Defends Attorney General Pam Bondi Amid Epstein Memo Backlash
Renault Shares Drop as CEO Luca de Meo Announces Departure Amid Reports of Move to Kering
Senior Aides for King Charles and Prince Harry Hold Secret Peace Summit
Anti‑Semitism ‘Normalised’ in Middle‑Class Britain, Says Commission Co‑Chair
King Charles Meets David Beckham at Chelsea Flower Show
If the Department is Really About Justice: Ghislaine Maxwell Should Be Freed Now
NYC Candidate Zohran Mamdani’s ‘Antifada’ Remarks Spark National Debate on Political Language and Economic Policy
President Trump Visits Flood-Ravaged Texas, Praises Community Strength and First Responders
From Mystery to Meltdown, Crisis Within the Trump Administration: Epstein Files Ignite A Deepening Rift at the Highest Levels of Government Reveals Chaos, Leaks, and Growing MAGA Backlash
Trump Slams Putin Over War Death Toll, Teases Major Russia Announcement
Reparations argument crushed
Rainmaker CEO Says Cloud Seeding Paused Before Deadly Texas Floods
×