City punters bet on bleak Budget

THE CITY's spread-betting fraternity is banking that Wednesday's Budget will be a damp squib for drinkers.

The latest bets being made with Cantor Index suggest extra tax will put up the price of a bottle of spirits by between 5p and 8p while a pint of beer will increase by between 1 1/2p and 2 1/2p. A bottle of wine is expected to creep up by between 3p and 6p.

Meanwhile smokers can expect to spend an additional 10p-14p on a packet of 20 cigarettes and tax on litre of petrol is predicted to rise by between 1 1/2p and 2 1/2p.

Other forecasts include a move to assuage Middle Britain by raising the inheritance tax threshold from £255,000 to around £274,000. Most accountants, however, predict the threshold will only rise in line with inflation.

Traders are also banking on a slight rise in VAT, possibly from 17.5% to 18%. Pundits have long expected a rise in value added tax, to bring the UK more in line with the eurozone‘s 22%.

Banks could also be in for a nasty surprise. Several of the UK's largest institutions have announced record profits in recent weeks.

Cantor clients believe a banking windfall tax could be on the cards. They have pencilled in a levy of between 0.3% and 0.7% on profits.