Gordon Brown will need all his political skills in this week's UK Budget to balance the public's desire for better public services against its resistance to paying higher taxes. However, claims of a black hole in the public finances seem wide of the mark.

If the Chancellor pares back departmental spending growth by 0.25% a year on average in the next spending round relative to previous assumptions, and raises taxes by £1bn to £2bn (€/2bn to €3bn), the government will be able to claim that it remains on track to meet its fiscal rules.