Some members of the committee also also appeared a bit more concerned over some of the weakness in consumer spending. Overall, we continue to think that rates will probably stay on hold for the next few months, and while a May hike is clearly possible, we still tend towards the view that the softness in high street activity, in particular, will encourage the MPC to maintain the curent stance of policy until August.
Alan Clarke from BNP Paribas says:
Broadly as expected. I think it is a slight evolution in the hawkish direction, particularly the emphasis on inflation likely to be above 5 percent and signs of higher pay pressures and concerns that externally-generated inflation, especially from commodities, threatens the medium-term inflation outlook.
They are moving in a hawkish direction, but for those members reluctant to hike, the uncertainty that is holding them back has got even worse.
09.46 So the MPC minutes are out. The Bank of England policy makers had voted 6-3 to keep interest rates on hold as they saw ?merit in waiting? to assess the oil-price jump, even as they forecast inflation may accelerate to faster than 5pc, Bloomberg reports. Snap reaction from the markets: Sterling falls to lows versus the dollar and the euro.
Sterling fall around to hit a session low of $1.6283 against the dollar. The euro rose around to a session high of 87.12 pence. June gilt futures briefly pared gains by ten ticks after the minutes to trade at 117.97, having stood at 118.07 before the release.
09.29 Seeking certainty? The Telegraph's Richard Tyler has Tweeted that Osborne can do what he likes today, it won't influence the PM's green agenda:
@richardtyler whatever happens on #budget day the lights will go out across Britain come Saturday's #earthhour (David Cameron says he will switch off his lights for an hour at 8.30pm)
09.21 It?s not just the Budget that the markets are looking out for today. At 1030 GMT - three hours before the Chancellor stands up - the Monetary Policy Committee will publish its minutes.
Gavyn Davies has written a blog on the ?very big day for UK economic strategy? on FT Alphaville.
He says:
The fiscal tightening, if fully applied, will be the second largest among all the OECD economies, amounting to almost 6 per cent of GDP over 5 years. Only Greece has embarked on a more draconian tightening. The impact of this tightening really starts to bite this year, when the structural budget deficit falls by 2 per cent of GDP, twice as much as last year.
In the absence of this fiscal tightening, the UK would have continued to run just about the largest ongoing budget deficit in the developed world, and the public sector debt ratio would have continued to rise into the indefinite future, exceeding 100 per cent of GDP by 2020.
09.15 As the graph below shows, the stock market is down shortly after opening, while the pound also fell against the dollar, ahead of the Budget announcement at lunchtime.
10-year UK government bonds looked more settled, with the yield declining, showing that investors regard British debt as a safer investment.
09.00 The Shadow Chancellor has finished his morning routine and is on his way to the office to prepare his reply to the Budget - traditionally a difficult and thankless task.
He's just Tweeted: @edballsmp Just dropped the children off at school - now to Westminster for the Budget speech
08.58 Talking of Osborne dropping the brief case, the actual vessel that will carry the Budget from Downing Street to Parliament is under debate. The famous tatty red leather Budget Box - which was first used by Gladstone in 1860 - is being retired (again) this year.
Apart from James Callaghan, who insisted on using a larger brown box in 1965 and Gordon Brown who commissioned a brand new red briefcase in 1997, every chancellor always used the same one. Osborne used it for the Emergency Budget but we were told that was the VERY last time because it is now deemed in too poor condition.
It?s unlikely that Osborne will revert to Brown?s modern red box ? surely too nouveau ? Citywire reckons a ?used supermarket carrier bag would be most appropriate.?
08.52 Over at the BBC, Robert Peston is also busy giving his views on the Budget. The big question is how to promote growth, according to Peston. He says:
To state the obvious, reducing the tax burden on multinationals - including big banks - would not be universally popular.
08:48 The BBC's political editor Nick Robinson is blogging on the Budget. He says:
Long term, however, it will be the extent to which he [George Osborne] embraces tax reform - sweeping away tax reliefs and merging income tax and national insurance - which will define him and this budget.
08:44 It's also a big day for Ed Milliband, his first Budget day as Leader of the Opposition. He told Sky News:
There would be cuts under Labour but we wouldn't go so far and so fast... We wouldn't be cutting taxes for the banks, we would have a bonus tax to help get the young unemployed back to work.
08.41 The bosses of some of Britain?s biggest companies have delivered their Budget wish-list to the Telegraph.
Andrew Moss, CEO of insurance giant Aviva, says:
The 2011 Budget must be encouraging people to save more for the long-term. We have one of the largest savings gaps in Europe - on average people in the UK should be saving �10,000 more a year in order to achieve a comfortable retirement.
08.40 The Treasury will serve up the Budget speech in bite-size chunks on Twitter later, get the link here.
08.37 Perhaps not as lofty as the growth and taxes but just as hot a topic: the Budget bets are open.
As ever the colour of the Chancellor's tie is the Big One. Boylesports is playing it safe offering 11/10 odds that Osborne will pick blue, 4/1 grey, 14/1 brown and 50/1 that he opts for the "Notting Hill Set" classic: the open neck shirt. Ladbrokes is far more punchy, confidently declaring that it is "most likely" that Obsorne will be wearing a purple tie today. The bookies political odds compilers make purple the 2/1 favourite with a red tie a 12/1 chance. It's 25/1 he wears an orange tie with white the 33/1 outside.
If Osborne's fashion doesn't tickle you, have a flutter on anything from catchphrases to blunders. Ladbrokes reckons it's odds on (1/5) ) that 'budget for growth' gets mentioned and 'tough choices' is an even money shot. Ladbrokes is also offering 8/1 odds that Vince Cable, the Business Secretary, gets caught yawning and 20/1 that Osborne drops the red brief case.
08.19 The consequence of NOT cutting the deficit? Portugal is getting closer to having to ask for an international financial bailout, the BBC has reported, after opposition parties withdrew their support for the country?s austerity measures.
08.18 The Telegraph has collected together a list of the best Twitterers to keep an eye on. They are already offering a pool of resources, here's a selection:
@hmtreasury Video: Chief Secretary to the Treasury Danny Alexander talks about the Government's priorities for the 2011 Budget bit.ly/eMTsLw #budget11
@benedictbrogan The Telegraph's Ben Brogan says: Let's call the 40p rate what it is ? the basic rate http://bit.ly/hcSARU
@ kamalahmed1 Kamal Ahmed: Key Budget sites PWC http://bit.ly/hlJoIP Deloitte http://bit.ly/i0KvXu Ernst and Young http://bit.ly/gxmMt6 #budget
07.58 Richard Fletcher, the Telegraph?s City Editor reckons that for all the tinkering, the Chancellor will not do anything to damage the confidence of the money markets. He says it will be a Keep Calm and Carry On Budget.
"According to economists at the Royal Bank of Scotland, it cost �95,000 to insure �10m of UK sovereign debt in the run-up to the May 2010 general election. Over the past year the cost has fallen to �73,000.
Yet Osborne knows that the hard work has just begun. Politically, the coming year will prove far more challenging for the Chancellor and his coalition partners, as the Treasury attempts to reduce public sector net borrowing from 10pc of GDP in 2010-11 to 7.6pc in 2011-12."
07.53 What does it all mean for your household's finances?
The Telegraph's personal finance editor Ian Cowie explains what help will be made available for savers, first-time buyers and homeowners.
07.48 The BBC?s Radio 4 Today programme have lined up former politicians to pour a healthy dose of scepticism about the Chancellor's promises for growth. David Mellor reckons George Osborne should "stand at the despatch box and say: I do not control growth."
Former Chancellor Norman Lamont adds that the problem with growth policies is that they take a very long time to make any impact. Lord Lawson agrees saying that economies can?t be micro managed - "all you do is complicate and mess up the tax system."
07.46 You can read the Telegraph?s round-up of the key points to watch out for in today?s Budget here.
Philip Aldrick, Economics Editor, says today?s Budget is George Osborne?s chance to show his true colours.
Phil also talks you through the budget deficit, and the problems of slow growth, inflation and unemployment here:
Budget 2011 interactive graphic: Britain's balancing act
07.40 Watch Damian Reece?s Budget preview here:
07.37 This morning's papers give the first lesson in how the numbers can be cut very differently. The Daily Mail has announced that 25m workers will be promised tax cuts of up to �320m a year. Meanwhile The Sun reckons that the figure will be �205m for 23m workers.
07:35 The Chancellor will raise the tax-free threshold by �600 to more than �8,000 on today's Budget, which will see 25m people receive a �45 tax break a year, the Telegraph reports on its front page.
07.30 Good morning it?s Budget Day. After tough deficit reduction measures in the Emergency Budget in June, the Coalition has been at pains to insist that today will be about growth. More likely it will be a big dose of reality as some of the cuts come in. We're here to scrutinise the complexity and bring you the analysis and commentary as it happens.
The economic backdrop to the 2011 Budget darkened on Tuesday with a shock rise in inflation to 4.4pc and higher-than-expected borrowing in February.
This followed a survey showing Britons have suffered the biggest drop in living standards for 30 years and reports that the Office for Budget Responsibility is expected to cut its growth forecasts for the economy.
A number of measures had been flagged ahead of the day, including:
? NHS to lose out to private firms
? Air Passenger Duty will not be increased
? Taxes on non-domiciles
? Cut in tax paid by UK companies on foreign profits
? Deprived areas are to become Enterprise Zones
An electric chair and other macabre artifacts, including a Ku Klux Klan hood and robe from the 1920s and a wooden cage used in the late 1800s to restrain mental institution patients, will be on display next month as part of a new, R-rated exhibit at the Ohio Historical Center in Columbus.
Complaints about a concert promoter who did not issue refunds after a canceled Bret Michaels concert spurred state officials to take action in response to a rock show gone wrong.
Walgreen drugstore chain is buying Drugstore.com for $409 million. That's nearly 102% more than the company is valued at, but the move lets the traditional retailer gain a foothold on the Internet that it's been unable to do on its own.