Osborne boosted by improvement in public finances

Chancellor George Osborne has been given a boost ahead of next month's Budget after official figures showed the UK posted its largest budget surplus in four years.

According to figures released Tuesday by the Office for National Statistics (ONS), the public sector made a net repayment excluding financial interventions of £7.8bn in January, up from £5.2bn a year ago.

This was the highest monthly surplus since January 2008 and takes government borrowing to £93.5bn in the tax year to date, down almost £16bn from £109.14bn in 2010/11.

A reduction in local government borrowing helped drive the improvement in public finances.

The figures suggest government borrowing is on track to meet or fall below its £127bn target for 2011/12 and will come as welcome relief to George Osborne after Moody's last week warned the UK could lose its prized triple-A rating.

The figures will also provide a lift to the coalition government's deficit-cutting agenda ahead of next month's Budget.