Government borrowing reached £8.8bn in January, the highest January borrowing total since monthly records began in 1993, according to new figures published by the Office for National Statistics (ONS).
The total was £18.4bn more than in January 2020 and also represented the first January deficit for 10 years, as the government continued to fight the cost of COVID-19 support measures.
Central government tax receipts are estimated to have been £63.2bn in January, a figure £0.8bn lower than in January 2020, with notable falls in taxes on production such as Value Added Tax (VAT) and Business Rates.
The figures also revealed that self-assessed Income Tax receipts were £16.8bn in January 2021, which was £1.4bn more than in January last year, but the government spent £19.7bn more than last year on support measures such as the furlough scheme.
The ONS stated that coronavirus has had a “substantial impact” on the economy and subsequently on public sector borrowing and debt, but warned that despite the impact of the pandemic on public finances becoming clearer, its effects are not fully captured in this latest release – meaning that estimates of accrued tax receipts and borrowing are subject to “greater than usual uncertainty”.
The latest official forecasts, which were published by the Office for Budget Responsibility (OBR) on 25 November, indicated that the £270.6bn borrowed by the public sector in the financial year to January 2021 could reach £393.5bn by the end of March.
The OBR is set to publish an updated set of forecasts alongside the Budget on 3 March.
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