Rachel Reeves’ ‘black gap’ gone abruptly – however Brits braced for main tax hikes
The Treasury has been handed a surplus of £30.4bn in January, new figures from the Office for National Statistics (ONS) show, after a surge in tax receipts
Her surplus has grown(Image: Alishia Abodunde, Getty Images)
Rachel Reeves has somehow found a £30.4bn surpless . . . far larger than the £22b one she’s been blaming for all her ills for around 18 months. And she has also managed to achieve a record-breaking borrowing respite, new data released ahead of her Spring Statement in March shows.
This figure is £15.9bn higher than that of January 2025 and £6.3bn above the Office for Budget Responsibility’s (OBR) November 2025 prediction. “January – which is traditionally a strong month for self-assessed tax receipts – saw the highest surplus since monthly records began,” stated Grant Fitzner, chief economist at the ONS.
Borrowing for the financial year up to January 2026 reached £112.1bn, approximately 11.5 per cent lower than the same 10-month period the previous year. However, it still marked the fifth-highest April to January borrowing run on record, as reported by City AM.
Meanwhile, total public sector spending rose slightly by £900m from January 2025, reaching £112.7bn. This was largely attributed to a decrease in interest payable on central government debt.
Capital gains tax (CGT) receipts experienced their highest January on record, with total receipts increasing by £7bn to £17bn, indicating fears over future tax increases may have sparked a significant asset sell-off.
Economists at Capital Economics suggested the surge came as people braced for a tax increase, meaning it was “not a sustainable improvement”.
They said: “And the big picture is that borrowing has failed to come down much this year. The risk of borrowing overshooting our forecast further ahead has also grown if Starmer/Reeves seek to shore up their positions by raising borrowing, or if a leadership challenge ushers in a less fiscally responsible PM and Chancellor.”
Reacting to the latest figures, Chief Secretary to the Treasury, James Murray stated: “We have the right plan to build a stronger, more secure economy. We have doubled our headroom, we are bringing inflation down, we are making sure that taxpayers’ money is spent wisely, and borrowing this year is forecast to be the lowest since before the pandemic.”
Shadow business secretary Andrew Griffith remarked: “There’s nothing good about the Treasury gorging itself on record taxes from businesses and families. That’s doubly true if it was due to forced sales ahead of tax hikes. “You can kill the golden goose and enjoy a momentary feast but poverty soon follows.”
In January, data for the end of 2025 revealed total borrowing costs for the financial year had exceeded £140.4bn, nudging past the Office for Budget Responsibility’s (OBR) prediction of £138.3bn.
The Chancellor will present her Spring Statement on March 3, 2026, where reports suggest the Treasury is aiming to downplay the event in an effort to avoid disrupting the bond markets and pushing borrowing costs higher.
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