BoE’s Dhingra warns against delaying interest rate cuts; ‘limited room’ for tax cuts after record UK budget surplus – as it happened

Rolling coverage of the latest economic and financial news, as UK's budget surplus doubles year-on-year... and BT Tower is sold to hotel chain

• BT Tower to become hotel as London landmark sold for 275m
• Jeremy Hunt handed tax boost as UK posts record monthly budget surplus

Martin Beck, chief economic advisor to the EY ITEM Club, has analysed today's public finances, and concluded that Jeremy Hunt will have limited" headroom to cut taxes while sticking to his fiscal rules.

Beck says:

January's outturn, combined with downward revisions to earlier months, means borrowing in 2023-2024 should come in below the OBR's forecast of 123.9bn. But with the Spring Budget approaching, the Chancellor's focus will be on how much headroom the OBR projects against his medium-term fiscal targets.

On that issue, the market curve for interest rates over the next few years is lower than that adopted by the OBR in November, which should cut forecast spending on debt interest. And the OBR's new forecast will incorporate the Office for National Statistics' (ONS) new and bigger population projections which, all else equal, should raise projections for GDP, employment and tax receipts.