Osborne budget likely to be devoid of any giveaways
UK Chancellor George Osborne promised another austere budget as calls to stimulate the economy became more muted, easing political pressure on the government.
Mr Osborne said that the problems facing Cyprus are a reminder of what financial markets will do to nations that fail to act and suggested that Wednesday's budget will be free of giveaways.
He promised measures to help British retirees, military and diplomatic staff in Cyprus who are affected by the tax on bank deposits dictated by the island's bailout.
"There is no easy answer, there is no miracle cure," Mr Osborne told the BBC. "We have to go on confronting the very difficult economic problems."
Calls for greater action to aid growth from both his Conservative Party and the Liberal Democrats in the coalition government have subsided in recent days, suggesting Mr Osborne's budget will include measures to appease cabinet critics such as Business Secretary Vince Cable.
Mr Osborne will have to fund such actions with cuts elsewhere to stay the course on austerity.
The Labour Party repeated its call for Mr Osborne to cut VAT, reduce National Insurance contributions for small companies and reintroduce the 10pc starting rate of income tax.
The party's Treasury spokesman Ed Balls suggested he would back an income tax cut. (Bloomberg)