Osborne suffers blow despite £11.4bn surplus

The Chancellor was left nursing a £5.1bn black hole after the Office for National Statistics (ONS) said not all of the funds transferred from the Bank of England’s economy-boosting programme were allowed to go to Government coffers.

The ruling came just a day after the auction of 4G mobile airwaves raised £2.3bn for the Treasury – far less than the £3.5bn that had been estimated.

The ONS said the Government recorded a net surplus of £11.4bn last month, excluding interventions such as bank bailouts, compared with a surplus of £6.4bn a year earlier.

Economists fear January’s surplus will not be enough to prevent the Government overshooting its borrowing target and said Britain remained at risk of losing its coveted AAA debt rating.

However, the pound took heart from last month’s better-than-expected borrowing figures as it clawed back some of the ground lost in recent days on fears the Bank will take further action to bolster the economy.

Meanwhile, the Government is being taken to court by Brussels for offering across-the-board tax cuts to encourage homeowners to make their houses more energy-efficient in its Green Deal.

The European Commission claimed that, under EU rules, such VAT reductions must be linked to “social policy”.

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