PwC comments on Public Sector Finance data - February 2026

Commenting on the latest ONS public sector finance data, Nabil Taleb, economist at PwC UK, says: 

“Public sector net borrowing was in surplus of £30.4bn in January 2026, £15.9bn higher than January 2025 and £6.3bn above the OBR’s forecasts. January tax receipts are typically higher than in other months due to receipts from self-assessed taxes but nevertheless, this represents the largest surplus since monthly records began just over three decades ago. 

“Debt interest payments in January were £1.5bn, £5.0bn lower than in the same month last year. This decline eases immediate pressure on the public finances and provides some welcome relief for the Chancellor. Higher debt servicing costs as a share of total revenues leave the public finances more exposed to future economic shocks.  

“The broader outlook for the public finances remains finely balanced. Inflation has eased to 3% and interest rates are widely expected to fall in the coming months, which could gradually reduce the government’s borrowing costs and offer some relief to the Treasury. But with growth still sluggish and unemployment expected to edge higher, tax receipts could come under pressure, narrowing the Chancellor’s headroom. After December’s stronger revenues and this month’s surplus, the key question is whether this momentum can be sustained. For now, the fiscal picture is one of mixed pressures, with the coming months likely to determine how much room for manoeuvre the government ultimately has.”