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Rishi Sunak dashes hopes of big Spring Statement giveaways

It was also much higher than the £8.4bn expected by economists while debt interest payments rocketed 53pc to £8.2bn compared to a year earlier.

However, big revisions to the previous month’s borrowing data mean the Chancellor’s hand was strengthened going into Wednesday’s Spring Statement. 

The ONS said the surplus in January was higher than thought at £7.1bn, up from the previous estimate of £2.9bn.

Borrowing in the first 10 months of the financial year was £138bn, more than half of the previous year. It was also £26bn less than expected by the Office for Budget Responsibility in October after stronger tax receipts.

It came as the Centre for Economics and Business Research revealed that cancelling the National Insurance rise would boost wages by 0.6pc as well as increasing take home pay kept by workers. 

It would be equivalent to a £7.2bn rise in wages, or £222 a year per worker, while it would lift business investment by 4.5pc after two years, a £9bn increase.

Economists at Capital Economics calculated that the tax increase would reduce wages by £185 per employee and deal a 3pc hit to investment, equal to a £6bn blow.

Bethany Beckett, economist at Capital Economics, said: “We expect hopes of a big handout at the Spring Statement tomorrow to be dashed. The Chancellor will try to balance the near-term benefits of supporting households with the medium-term goal of fiscal restraint, allowing him to loosen policy ahead of the 2024 election.”

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