Osborne may struggle to meet target despite January surplus

The Office for National Statistics said public sector net borrowing excluding banks was in surplus by £11.2 billion in January, fuelled by strong tax receipts.

It was the biggest surplus the month had seen since 2008, with Government borrowing for the financial year between April 2015 and January 2016 reaching £65.5 - £10.6 bn lower compared to the same period the year before.

But the surplus was below economic forecasts and has put the Chancellor under further pressure to meet his target set by the Office for Budget Responsibility (OBR).

The OBR estimated the Government would borrow £73.5bn for the financial year to March.

Mr Osborne will now only be able to borrow £7bn for February and March if he is to meet its expectations. Last year the Government borrowed £14.8bn over the period.

The OBR said while it expects “stronger growth in receipts in the remainder of the year”, it added that “considerable uncertainty remains over prospects for the remaining two months”.

Mr Osborne said while the deficit is falling, there is still more work to do.

He added: “We’ve learned there is no shortcut to fixing the public finances and when confronted with global economic turbulence, we can’t let up in taking the action necessary to build a resilient economy and deliver economic security for working people.”