New figures from the Office for National Statistics have shown that the chancellor's budget surplus continues to grow.

Government finances recorded a surplus of £16.7 billion in January. In his pre-Budget Report of November 2000 Gordon Brown had forecast a surplus of £10 billion.

The figures also exceed the £14.8 billion figure for the Public Sector Net Cash Requirement that had been expected by analysts.

News of the healthy public finances will increase the scope for tax cuts in the forthcoming Budget on March 7.

However, the announcement follows reports that the CBI has urged Brown to limit any pre-election budget giveaway to £2 billion to leave scope for further interest rate reductions by the Bank of England.