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Today is the day, the Budget announcement is out at 12:30, and if we haven’t gone on about it enough here is a brief refresher before the big event. Osborne is likely to stick to his current combination of tight fiscal and simple monetary policy as any change to the current spending cut plans could damage growth. The recent Inflation surge to a 28-month high on Tuesday has done much do provide an ominous opening to the budget, although sterling strengthened on the figure it also could provide more chance of an interest rate rise in May. Public sector borrowing came out well above economist’s forecasts yesterday, at 10.280 billion up from 8.105 billion, which I doubt would have pleased the Treasury. We also have the BoE minutes this morning and Mortgage Approvals!

Portugal is preparing itself for a crisis which could see the government resigning and a snap election occurring, not to mention create an international financial rescue impossible. The current Prime Minister, Jose Socrates, will likely be forced to resign when his party lose the vote on a new austerity package today. Any Government issue would hit confidence and push the country towards seeking financial rescue from the EU and IMF. There was also market rumours yesterday that Ireland has missed a coupon payment which caused euro to weaken a touch.

The Federal Bank of Cleveland President Sandra Pianalto said yesterday that she believed the US economy would continue to expand at a ‘moderate pace, slightly above the average growth rate of about 3 percent a year’. The Fed are planning to go ahead with the plan to purchase $600 billion in treasury securities in an attempt to help the economic recovery. This comes at a time where the unrest in the Middle East could see a sustained spike in oil prices which could slow GDP growth in the US. Pianalto also commented, ‘that the longer the US puts off dealing with fiscal issues the bigger the problem will become…the US must start to put together a credible plan to deal with fiscal problems’.

Meanwhile the US is calling for Obama to be clear about their goals in Libya. The defence minister has commented that the intensity of the military campaign in Libya will ease after the no-fly zone is imposed. Gaddafi’s forces continue to attack western Libya towns, with his tanks shelling the rebel-held town of Misrata killing many casualties including four children.

Other than the big UK data drops today we will see the Eurozone Consumer Confidence this afternoon and Industrial New Orders in the morning at 11am.

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