For people investment planning in Oswestry or Cheshire, three new reports have provided indications of renewed resilience in the British economy. Ahead of her March statement, the Chancellor Rachel Reeves will also have been heartened by the encouraging data.
Economists are saying that a surplus in the public coffers, an upward trend in retail spending, and an increase in business activity all indicate evidence of economic recovery.
Figures released by the Office for National Statistics (ONS) showed that public sector finances stood at £30.4 billion in January, beating forecasts and recording their biggest monthly budget surplus since 1993. It is being attributed to a big increase in capital gains tax receipts and self-assessment. Retail sales recorded their highest monthly rise in nearly two years, up 1.8%, benefiting from a strong performance in the jewellery, arts and antiques sectors.
Elsewhere, a poll of UK purchasing managers by S&P Global found strong momentum across the private sector. It revealed the fastest rise in commercial activity since April 2024. Companies in manufacturing and services, in particular, reported solid performances in business activity expansion.
Senior Investec bank economist, Sandra Horsfield, said the triple whammy of good news pointed to a brighter outlook for the UK, following a disappointing close to 2025. The figures mean the Treasury will have more headroom when the Chancellor presents her next fiscal statement on March 2.
Other economists have warned that there is still some uncertainty in the economy, with the planned rise in fuel duty making revenue forecasts difficult to predict. Lower inflation coupled with higher unemployment may yet lead to further interest rate cuts by the Bank of England.
