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Breakfast Wednesday, 9 April, 2003, 06:21 GMT 07:21 UK
Counting the cost of war on budget day
Breakfast's coverage of the 2003 budget
Will the war with Iraq affect Mr Brown's spending plans?
It is budget day and this afternoon, the Chancellor of the Exchequer Gordon Brown will outline his spending plans for 2003 and 2004, to the House of Commons.

Two factors are likely to affect Mr Brown's plans: The global economic downturn and the growing cost of the war with Iraq.

The combined effect of both of these will play havoc with his numbers and he could also concede that he was wrong by over estimating the amount the UK economy would grow by.

But the issue that many will be interested in is income tax. The poor performance of the economy means that the chancellor has not collected as much tax revenue as forecast.

This could lead to Mr Brown borrowing more now and repaying it when the economy improves but if he wants to carry on spending at the current rate - this could mean higher taxes.

"Surprise in the budget"

UK economist for HSBC bank John Butler told Breakfast about his expectations for this year's budget.

He explained: "Today's problem is weak growth and if there is a risk the risk is you'll get a tax cut - that could be the surprise in the budget."

  • To watch Declan Curry's interview with UK economist John Butler click on the link below


    If you want to go to BBC News Online's detailed Budget pages - click on the link at the top right-hand side of the page.

    And if you fancy having a go at playing Chancellor yourself, click on the link below to see if you could do a better job of balancing the books.

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    Click here for more on the budget from BBC News Online
    2003 Budget


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