A ray of light may be breaking through the Eurogloom. The Wall Street Journal reports that the U.K. government deficit is smaller than expected. The Krugman catastrophe has not occurred despite the belt-tightening of the Cameron/Clegg coalition.
Public sector net borrowing was negative in January—meaning a surplus—to the tune of £7.8 billion ($12.36 billion), the Office for National Statistics said Tuesday. That was higher than the £6.4 billion economists expected, and marks the biggest surplus since January 2008.
The future is still looking grim as growth is slow and the EU is as sick as ever. But the U.K.’s bet on austerity and reform may just be paying off.