Rachel Reeves has three options to dodge an economic crisis and all are unthinkable
Guardian6 days
UK: Record January Surplus Falls Short of Treasury Targets
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Above: UK Chancellor Rachel Reeves delivers a speech on economic growth for Britain at Siemens Healthineers on Jan. 29, 2025 in Eynsham, England. Image copyright: Peter Cziborra - WPA Pool/Getty Images via Getty Images
The Facts
The UK public sector recorded a £15.4B surplus in January 2025, marking the highest January surplus since records began in 1993, though falling below the Office for Budget Responsibility's (OBR) October forecast of £20.5B.
Combined self-assessed income and capital gains tax receipts reached £36.2B in January 2025, representing a £3.8B increase from the previous year, yet still fell £3B short of official forecasts.
Public sector borrowing for the financial year to January 2025 totaled £118.2B, exceeding the previous year by £11.6B and surpassing the OBR's forecast by £12.8B, marking the fourth-highest borrowing level since monthly records began.
The Spin
Left narrative
Despite the surplus data, Rachel Reeves deserves support for her steadfast leadership in navigating one of the most challenging fiscal environments in recent history. While short-term solutions seem elusive, her long-term strategy of borrowing to boost public investment and infrastructure is the right approach to stimulate productivity. Growth may be sluggish, but Reeves is committed to tackling structural problems — making her essential to Labour's economic vision.
Right narrative
Reeves's handling of the economy is increasingly worrying, with the latest surplus data exposing the flaws in her approach. Instead of prioritizing fiscal discipline, she has chosen to burden the country with higher debt and spending. The undershoot in public finances shows Labour's inability to manage the national budget responsibly, leaving taxpayers to pay the price. Reeves' strategy risks worsening Britain’s debt crisis, fueling inflation, and stifling growth.
