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WHAT WILL THE EFFECTS BE OF LIKELY BUDGET MEASURES?

SIMON HAYES | BARCLAYS CAPITAL
"Higher taxes, large cuts in public services and reduced welfare payments all seem likely. We would expect it to be viewed positively by financial markets."

MICHAEL SAUNDERS | CITIGROUP
"A tightening of £25bn, split between a £10bn tax hike and eventual spending cuts of £15bn. This should mean a drop in the deficit and a more sustainable recovery."

PETER DIXON | COMMERZBANK
"We are doubtful that the private sector is strong enough to take more of a near-term squeeze than 0.5 per cent of GDP worth of spending cuts and a hike in VAT."

JONATHAN LOYNES | CAPITAL ECONOMICS
"While a better fiscal position will improve the economy’s long-run prospects, we are certain that the consolidation will act as a major drag on the economy."