UNSURPRISINGLY, the Budget gets top billing across the front pages today, with many newspapers noting just what a politicised document the governing Labour Party has presented.
The FT says chancellor Gordon Brown has set up the battle lines between Labour and the Tories ahead of the next General Election.
And by committing to cutting Whitehall budgets, the chancellor has boxed his opponents into a corner from which they cannot come out unless they promise even more public sector job cuts, which would probably undermine the ability of departments to deliver services.
The Daily Telegraph says whatever the chancellor has done, it is costing the country an extra £1.5bn a week in taxes compared to when Labour came to power in 1997.
The main culprits are higher National Insurance payments and cutbacks on indexing of allowances in line with increases in earnings, it notes.
The Scotsman says Browns’ Budget, while taking a swipe at the Tories, fails to address some serious economic issues, such as the housing market, the credit card boom, and the still-massive government deficit.
This may simply mean deferring tax rises until after the next election, the paper writes, while the £20bn promised to be liberated by cutting back on public services administration will be no easy task.
OVERSHADOWED BY the Budget was the release of the Bank of England’s Monetary Policy Committee minutes from its meeting earlier this month, which showed continued concerns among the people who set UK interest rates over the state of inflation.
The MPC voted unanimously to keep rates at 4%, while new figures show private sector earnings have risen in the past month at their fastest rate since 1992 as City bonuses have lept on the back of last year’s stockmarket performance.
The bonus issue may be short-lived, but economists point out the data provides the first evidence of domestically generated inflation beyond that with which the MPC is comfortable, The Times writes.
THE INSURANCE sector got a boost from Munich Re’s figures, published yesterday, which showed the company managed to maintain its dividend despite record losses in 2003.
The FT reports the full-year loss was the reinsurance giant’s first since the 1906 earthquake hit San Francisco. However, the net loss of €434m was within the range forecast by analysts, while ratios of assets and premiums to liabilities and claims improved.IFAonline
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