Commentary on the Public Sector Finances January 2023

This means that on a like-for- like basis, borrowing was £30.6 billion (22.0 per cent) below profile in the first ten months of 1 On 20 February 2023 we corrected an error in our monthly profiles driven by the fact that January public corporations net borrowing did not reflect the impact of the Asset Purchase Facility, which affected the profiles for both public corporations and public sector net. [...] the split between January and February payments4) and stronger underlying receipts (relative to the growth in tax liabilities assumed in our November forecast on the basis of outturn data in respect of the different SA income streams). [...] Year-to-date receipts from oil and gas firms in the first ten months of this year totalled £9.1 billion, compared with £2.0 billion for the whole of 2021-22, reflecting the surge in oil and gas prices and the introduction of the EPL. [...] 3 November forecast, we assumed that some of the strength in onshore corporation tax receipts seen in the first half of 2022-23 would persist into the remainder of the financial year, but that it would gradually diminish given the effects of wage and energy costs on profit margins. [...] The downside surprise was partially offset by investment spending coming in £1.2 billion higher in January as a result of a payment to the EU relating to failure to prevent the undervaluation of customs duties on Chinese footwear and textile products while a member of the EU, which was not reflected in our forecast.