Expectations of the budget tomorrow and market reactions

at11

So the 2013 budget is due tomorrow lunch time, and this year there was been little 'leaked' information. A lot is expected to be announced though

What are other private investors predictions on the market reaction to tomorrows budget?
Do you see any key points that would cheer the market, or scare the market?

the problems in Cyprus dont seem to be affecting the market, surprisingly

grizzly1911

I really don't see much change. Steady as she goes and hope for the best.

I think any changes will be tinkering at the edge.

Europe issues may well be different matter.

Thrugelmir

Main plank of the budget will be based on Heseltine's agenda to rejuvenate the economy. Be interesting. As Heseltine is a knowledgable and respected business person in his own right. So Ed may have difficulty in rubbishing the proposals.

Overall budget will be pretty dull. With further fiscal tightening a certainty.

Masomnia

Can't see it being too exciting. Deficit too big for any major giveaways, too close to the election for any major cuts.

pqrdef

Desperation time for Osborne. Nothing has worked. The private sector has failed to deliver and growth is non-existent. Meanwhile, the deficit reduction is off-target, the pound is tanking, and the triple-A is heading down the tube. And Osborne is all out of ideas.

There'll be a lot of sound and fury to try to disguise the void. But there won't be anything that will do any good.

Cameron relies on Osborne to tell him what to think, but at some point he's going to ask himself whether he can go into the next election with Osborne still at no. 11.

ColdIron

Osborne's made his first tweet

Today I'll present a Budget that tackles the economy's problems head on helping those who want to work hard & get on

https://twitter.com/George_Osborne

[Deleted User]

It's not an easy position for the Chancellor. There are posters all over the Forum with a variety of ideas, but for me it's all about confidence. Confidence can't be forced through by a majority in Parliament.

I've mentioned elsewhere that it almost doesn't matter what tax rates/public investment proposals come out. If you think you might be out of a job in six months, or are facing years of below inflation pay rises, if any rise at all, you are simply not going to spend.

Given that the Government is politically tied in to the "austerity" mindset, it is really stuck. If that mindset cannot move, the only significant areas for action that might stimulate the economy into growth that I can see are -

A significant increase in personal allowances - there are far more low wage earners than high wage earners, and I believe that in general "poorer" people are more likely to spend each additional pound locally or on British products than a "richer" person is, as the richer may be more likely to purchase more "luxury" items including, crucially, imported goods, or to otherwise spend the money abroad on more or longer holidays.

Some action to reduce the costs of employment for employers - but it would have to be offset form anticipated tax and NI receipts and lower overall benefit bills.

Some action on housebuilding might help, but without some action to spread growth away from the already overheated London/South East, that action will simply draw more people there, placing even more pressure on infrastructure - transport, water etc.

I don't see any room for giveaways as G.O. needs the tax too much.

I might end up being surprised - he might announce a reviews of some government expenditures - removal of winter fuel allowance/bus pass etc for pensioners who are higher rate taxpayers? That might be the kind of thing you do immediately after an election, not in the 2 years before one.

Maybe some populist ones - fair cost road tax certificate for foreign lorries or similar?

Should be interesting viewing today - not particularly what G.O. says, I'll be more keeping an eye on the faces of his colleagues around him as he speaks.

WR

alanq

I assumed that NS&I would not be trying to attract much in the way of new funds as to do so would draw money away from the banks which is contrary to what is required.

It has been confirmed that NS&I has been given a £0 target (+/- £2billion)
http://cdn.hm-treasury.gov.uk/budget2013_annexa.pdf

It seems anyone awaiting the return of Index-Linked Savings Certificates will have a long wait.

at11

thanks for all the replies,
looks like the markets were not to bothered with the budget.

But im guessing the problems in Cyprus are hiding under the radar and that at any point in the near future can tank the markets
does anyone expect this? have you got your FTSE short at the ready?