Asda and Morrisons rationing some fruit and vegetables; UK private sector returns to growth – as it happened

Asda introduces a limit on tomatoes, peppers, cucumbers, lettuce, salad bags, broccoli, cauliflower and raspberries, after bad harvest hits supplies

• Full story: Asda and Morrisons to ration tomatoes, peppers and some fruit
• UK runs short of salad crops and citrus fruits after cold spell in Med

Martin Beck, chief economic advisor to the EY ITEM Club, cautions that chancellor Jeremy Hunt may not be handed more headroom on tax and spending decisions by the Office for Budget Responsibility next month:

The final set of public finances data before the Spring Budget saw the Government achieve a smaller surplus than in January 2022, but one that was much higher than the OBR's forecast. The better-than-expected performance was mainly due to stronger tax revenues.

The extent to which the OBR deems the improvement in tax revenues to be structural is uncertain, and there's a question mark over how it will adjust its estimates of the economy's potential output growth in next month's Budget. Therefore, better borrowing figures may not translate into more fiscal headroom for the Government.

Inflation is having a push and pull impact on the public purse. On the one hand, it is positively impacting tax receipts as prices rise. On the other hand, inflation is increasing its interest payable on index-linked government bonds and it is adding to government expenditure, particularly on energy support.

The Chancellor gets set to deliver his Budget on 15^th March. No doubt the government will point to today's PSNB figures to highlight the Treasury's focus on fiscal prudence, a contrast to the fiscal fiasco around the mini budget last year.