Expected fall in January tax revenue will give Chancellor a pre-Budget headache

The first indications that George Osborne's deficit reduction timetable is slipping could come this week with the release of the official public borrowing figures for January.

Some economic analysts forecast that the public sector net borrowing statistics for last month, due on Tuesday, will show a fall in tax revenues on similar levels to a year ago. Philip Shaw of Investec said: "We think it's likely the figures will be less good than in January last year."

January is normally a bumper month for tax revenue, as thefigures are boosted by self-assessment income tax returns, plus capital gains and corporation tax payments. In January 2011, the ONS registered a surplus of £5.1bn.

Tax revenues in the month were £59bn, £10bn higher than the next best month of the fiscal year. Investec are forecasting a fiscal surplus for the Government this January of £4.7bn – a worsening of around £500m on the position of a year earlier.

Other analysts emphasised the importance of this week's figures for forming a judgement over the outlook for the public finances. "With January being such an important month for receipts, if that [positive] trend isn't maintained it will cause the Chancellor some headaches in the run up to the Budget," said Sam Hill, a strategist at RBC Capital Markets. "Not only will it mean savings coming from elsewhere to keep things on track into 2012-13," he added, "but it will also spark another round of criticism from those who say the Government's austerity strategy is self defeating."

However, Mr Hill also said if tax revenues remain buoyant the Chancellor will gain a political fillip after the knock delivered by the threat to the UK's credit rating last week. "He would surely use that as a rebuttal of the concern expressed in Moody's decision to put the UK's outlook to negative."

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