THE British government seems set to overshoot its target for public borrowing this year, after it collected less tax than expected in February while spending more than it planned.

The likely overshoot casts fresh doubts on the ability of Mr Kenneth Clarke, the Chancellor of the Exchequer, to provide significant tax cuts before the general election due next year.

But with one month left until the end of the financial year on March 31st, some economists hope that the picture will improve if departments cut down on spending this month.

The downbeat news on public finances was partly offset yesterday when the Bank of England said the government would reach its inflation target.

Mr Eddie George, governor of the Bank of England, said in Stockholm that the bank currently expects to meet the (inflation) target of 2.5 per cent or less through 1997.

His comment is the first public hint that the bank supported the Chancellor's decision to lower interest rates from 6.25 per cent to 6 per cent earlier this month.

But with an election looming, the City suspects room for further interest rate cuts is limited, while the scope for large tax cuts may also be constrained.

The Central Statistical Office said the government borrowed £3 billion sterling in February, taking the total public sector borrowing requirement (PSBR) for the financial year to £22.6 billion. This level was fractionally lower than the City expected, and better than last year in February 1995 the PSBR was £5.1 billion, while in the first 11 months of the 1994-1995 financial year borrowing was £25.8 billion.

But the figure was flattered by proceeds from privatisations. Without these, the PSBR in February was £4.4 billion, compared with £5.1 billion the previous year.

The underlying trend cast doubt on the government's ability to meet its target of reducing the PSBR to £29 billion this year, from £35.9 billion last year.

Most City economists now think borrowing will overshoot by £2 billion to £3 billion, or by almost as much as the tax cuts unveiled by Mr Clarke in last November's budget.