LONDON (Reuters) Stronger tax revenues helped Britain to a bigger-than-expected budget surplus last month, raising the possibility the government might borrow less than planned in the 2010/11 fiscal year.However, there is a strong chance Chancellor of the Exchequer (finance minister) George Osborne will bank any savings rather than shower largesse in his March 23 budget, as economists expect it to be harder for him to meet the coming financial year’s tougher borrowing targets.“Borrowing is likely to undershoot the OBR’s full-year forecast, but we’d be surprised if the chancellor deviates from the current plan in his March Budget,” said Andrew Goodwin, senior economic advisor to accountants Ernst & Young.January is a key month for Britain’s public finances, as it marks the payment deadline for a large chunk of the year’s income and corporation tax.Income tax receipts grew at their fastest year-on-year rate since 2005, helping the public sector net borrowing (PSNB) to show a surplus of £5.3 billion its highest since January 2009 and well above the 0.7 billion economists had forecast.The government’s preferred measure of PSNB, which excludes financial sector interventions and forms the basis for official borrowing forecasts, showed a £3.7 billion surplus. This was the highest since July 2008 and up from a deficit of £1.3 billion in January last year.“These figures represent very good news for the chancellor,” said Ernst & Young’s Goodwin. “It looks very likely that borrowing will undershoot the full-year projection of £148.5 billion, possibly by as much as nine billion.” Goodwin said this gave Osborne scope to ease back on the fiscal tightening planned for 2011/12, which is twice as sharp as that which has taken place in the current year though he expected the programme to remain largely unaltered.Reducing Britain’s budget deficit was a key election theme for Osborne’s Conservative Party in its successful 2010 election campaign, though the cuts planned by Osborne and his Liberal Democrat allies are viewed as excessive by Labour opponents.British public borrowing totalled £156.4 billion in 2009/10, equivalent to just over 11 percent of GDP and the highest deficit of any G20 economy. Tax rises and spending cuts in 2010/11 will only reduce this deficit to 10 percent of GDP far short of the one percent targeted for five years’ time.Economists said the steeper spending cuts pencilled in for 2011/12 and beyond were likely to prove more challenging than the relatively modest fiscal tightening undertaken since the coalition took power.“While the fiscal consolidation may have got off to a good start, we still think that the government will struggle to meet its fiscal targets next year, primarily reflecting the slowing of the recovery to a very sluggish pace,” said Samuel Tombs of Capital Economics.There are also reasons to suspect Britain has, in fact, borrowed more so far this year than yesterday’s figures from the Office for National Statistics show.Most of the undershoot is due to lower borrowing by local authorities an area of public borrowing figures that is subject to heavy revision and appears at odds with comparable numbers on local government spending in the ONS’s GDP figures.Moreover, the ONS itself said the seasonal upsurge in income tax receipts this January was stronger than in previous years, suggesting that Britons had done a better job in avoiding late payments that in other years have benefited the public accounts in February.Britain’s finance ministry said January’s good data did not reduce the need for tough measures to come.“The Government is determined to stay the course to deal with this unsustainable borrowing, and keep Britain out of the financial danger zone,” a Treasury spokesman said.