Chancellor Jeremy Hunt woke up on Tuesday to much better UK public finances data than expected. Public borrowing remains high, but is £30bn lower than anticipated 10 months into the 2022-23 financial year.
Improvements in the public finances are a double-edged sword for Hunt. He now has a £30bn windfall, according to data from the Office for National Statistics, providing him with more options on taxation and spending ahead of his March 15 Budget, but also creating more demands on public money.
The Treasury can no longer say there is no spare cash available, although it has legitimate concerns that the good news on the public finances does not allow the UK to go from famine to feast in one fell swoop.
How big was the surprise about the public finances?
It was huge. The Office for Budget Responsibility forecast in November that the government would borrow £177bn this financial year, roughly 7 per cent of national income.