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Tuesday, 20 February, 2001, 10:56 GMT
Brown's bulging war chest
Chancellor Gordon Brown
Brown: Scope for tax cuts of 2bn-5bn
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.

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See also:

20 Feb 01 | Business
CBI calls for tax cuts
12 Feb 01 | Business
UK spending levels under fire
14 Feb 01 | Business
UK unemployment tumbles
13 Feb 01 | Business
UK inflation at record low
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