George Osborne presents bleak picture for the budget

George Osborne presents a rather bleak picture of what he is likely to announce next week, suggesting there is still a lot more work to be done to build what he calls a resilient economy, and that his main priority is still getting the deficit down.

Writing in the Sun on Sunday (£), I think his underlying message there is don't expect any giveaways in next week's budget. Expect also that there could be more pain. I think that is likely to come in the shape of a new welfare cap which George Osborne will outline on Wednesday.

I think also it is likely to dash the hopes of senior Tories who have been pushing in the past few days for the Chancellor to look at raising the tax threshold on the higher 40p rate of tax. The Tories have been saying that the squeezed middle need more help.

I think it is unlikely that the Chancellor will do that. Instead I think he's more likely to raise the personal allowance again from £10,000 to £10,500. Something which the Treasury says does help those in the middle, as well as those on lower incomes.