Government sets Budget date

GORDON Brown has set Wednesday 16 March as the date for the Budget. The announcement was made during his trip to China.

Both economic and political commentators have been eagerly awaiting the announcement, with the timing crucial for an expected General Election in early May.

Some experts have warned that the Chancellor needs to raise taxes to balance the books and stick to his golden rule - to borrow only to invest over the economic cycle.

The Institute for Fiscal Studies (IFS) last month said income tax would have to be hiked by the equivalent of 3p in the pound with borrowing set to overshoot Brown's forecasts by £9bn over the next two years.

However, the latest data has gone the Chancellor's way and the Treasury has said that all fiscal rules will be met. A surge of corporation and income tax revenue produced a bumper £9.2bn surplus in January, which may be enough to meet the golden rule.

The Treasury, however, was criticised for attempting to shift some spending from 'current' to capital on the books, which does not count against his rule.

His growth targets also seem to be on track. Economists expect the second estimate of fourth quarter econonmic growth due on Friday to be even stronger than the preliminary figure, with economists expecting a revision up to 0.8% from 0.7%.