British public finances in surplus - official data

Britain's public finances registered a surplus last month of £25.1 billion according to official data.

The January figure for the public sector net cash requirement (PSNCR) compared with a surplus of £25.5 billion 12 months earlier, the Office for National Statistics said in a statement.

Public finances traditionally record a surplus in January because they are lifted by annual taxation receipts.

The public sector net borrowing requirement (PSNBR), the government's preferred measure of public finances, stood at a surplus of £3.3 billion in January, which compared with £13.9 billion for January last year.

Meanwhile, business taxation revenues sank by £2.5 billion last month compared with 12 months earlier, as British companies were hit by the deepening recession. "January always sees a surplus on the public finances at is a bumper month for tax receipts," said IHS Global Insight economist Howard Archer.

"Unfortunately though, bumper hardly describes the tax receipts for this January as they have been decimated by sharply contracting economic activity, declining profitability, rising unemployment, reduced bonus payments, December's VAT cut and substantially weakened housing market activity and prices."

The ONS added that Royal Bank of Scotland and Lloyds Banking Group have been classified as public sector organisations with effect from October 2008, when they were bailed out by the British government.

Under initial estimates, the move will add between £1.0 and £1.5 trillion to Britain's public debt - or between 70 and 100 per cent of total British gross domestic product, according to the ONS.