24 Feb 2025Figures published by the Office for National Statistics (ONS) have shown that tax receipts rose at a slower than anticipated pace in January. The data also revealed that a monthly surplus of £15.4 billion was reached in January, falling short of the £20.5 billion surplus expected by the Office for Budget Responsibility (OBR). Alex Kerr, UK Economist at Capital Economics, said: 'The undershoot was largely driven by disappointing tax receipts, which were £4.6 billion below the OBR's forecast, reflecting the recent weakness of the economy.' Speculation is now rife as to whether Chancellor Rachel Reeves will cut public spending or raise taxes in order to meet her fiscal targets. These targets include using tax income to pay for day-to-day government costs and to get debt falling as a share of national income by the end of this parliament. The OBR is set to publish its latest economic outlook on 26 March, whilst the Chancellor will announce her Spring Statement measures.