Alistair Darling is this weekend putting the finishing touches to what is likely to be his final budget as Chancellor of the Exchequer, whether the Labour Party is re-elected or not. While he has received some positive signs from the UK economy over the last few days, with government borrowings around £5 billion less than expected in February and speculation regarding a partial sale of the Lloyds bank shareholding, he will literally have to "rob Peter to pay Paul".

Despite headlines suggesting that potentially £5 billion-£10 billion may be available as "giveaways" in the budget, the UK government can ill afford to become reckless at this point in the economic cycle. The Bank of England has done its best to play down any short-term recovery hopes in the UK economy, having become more negative over the last few days at a time when hopes were high regarding a short to medium-term improvement.

There will obviously be a number of political angles to the forthcoming budget and we could see a smash and grab situation on high earners to subsidise those struggling at the other end of the income spectrum. Whatever happens, Gordon Brown and Alistair Darling will make themselves out to be the saviours of the UK economy and place the Conservative party as the devil in disguise with the potential to wreck the forthcoming recovery. It will be interesting to see press coverage of the budget and the reaction of voters.

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