DAVY VIEW

February’s exchequer returns showed a strong rebound in non-corporation tax growth, driven by income tax, albeit this came after a soft result in January. However, we point to new evidence that the labour market remains robust early in 2026 based on social insurance contributions; January and February growth is in line with the pace seen in recent years. After a rapid increase in January, current spending growth slowed below 6% in February. Capital spending, meanwhile, returned to modest growth.