A budget for an 'aspiration' nation

UK Chancellor George Osborne presented his fourth budget yesterday. He plans to stick to the path of deficit reduction saying he has cut the deficit by a third and UK interest rates remain at record lows. Headlines include a cut in the rate of corporate tax of another 1% to 20% in 2015, making the UK tax regime the lowest corporation rate of tax of any major economy in the world; an extension to the ‘Help to Buy’ scheme to aid first-time home buyers up to property valued at £600,000 which will be available to people on all pay scales and should facilitate families with higher availability of mortgages; and boost spending on infrastructure including roads and power stations by £3 billion a year from 2015/16 to be funded by day to day savings.

Osborne says "this is a budget to inspire people to work hard and get on".

Overnight, the US Federal Reserve stuck to its stimulus plans but reduced its projections for US economic growth this year and next. Economic activity is expected to gather pace at between 2.3% to 2.8% in 2013, compared to 2.3% to 3.0% growth predicted in the Fed’s last report in December. Growth projections in 2014 was lowered to between 2.9 and 3.4%.

In Cyprus, the fallout from the decision by the Cypriot parliament to vote to reject a €10 billion bailout deal that included a levy on saving accounts continues. Whilst the vote was widely expected, unless Cyprus comes up with another plan to raise funding, the country faces going into default and a subsequent exit from the euro zone.

Reports suggest that the Cypriot Finance Minister has flown to Russia to negotiate a new loan. Cypriot Finance Minister Michael Sarris has said discussions with his Russian counterpart Anton Siluanov were productive but that no decision has been reached.

Sarris said that talks on Wednesday had been “very honest” and promised that “we'll now continue our discussion to find the solution by which we hope we will be getting some support”.

Meanwhile, Dutch Finance Minister and Eurogroup President Jeroen Dijsselbloem said the bloc "deeply regretted" the vote, but that the issue was not over yet.

"It’s disappointing, but at the same time it’s clear that the offer from the Euro zone and the Eurogroup to Cyprus still stand," he said.