The UK's public finances recorded a surplus of �16.7bn ($24.1bn) in January, data released by the Office for National Statistics showed.

The public finances traditionally perform strongly in January because of large income and capital gains tax payments under the self assessment scheme, but this year's surplus was larger than expected.

Economists had forecast a surplus of �14.8bn for the so-called Public Sector Net Cash Requirement.

The surplus in the financial year to date is the biggest on record, with the latest numbers confirming that the public finances are set to record a larger surplus in the year as a whole than the �10bn the Chancellor Gordon Brown has himself predicted.

�15bn surplus

Analysts think the surplus might top �15bn - allowing the chancellor scope to give away between �2bn and �5bn in the Budget, scheduled for 7 March.

The likely tax cuts come as the government prepares to go to the polls after almost four years in office.

Prime Minister Tony Blair is widely expected to call a general election for May.

The figures came on the day that the Confederation of British Industry called for a �2bn cut in tax on business.

The figures had little effect on UK equity markets.

At 1041 GMT, the FTSE 100 index was flat, being up just 8.9 points on the day at 6,102.9.