Budget 2012: Tax allowances set to rise further

George Osborne is set to announce a significant increase in personal tax allowances for Wednesday's Budget. Osborne Must Find £5 Billion to Fund UK Budget Giveaways. The threshold at which anyone who pays income tax is set to increase to £9,205, benefiting millions of people. The chancellor is also expected to announce a cut in the top rate of tax from 50p to 45p, but not for a year. These measures are set to be paid for by ending tax reliefs and loopholes for the wealthy and raising property taxes. Ministers lifted the tax threshold by £1,000 to £7,475 in April 2011, meaning the first £7,475 of people's income is not liable for tax. Mr Osborne will unveil his third Budget in the House of Commons at 1230 GMT today.

The Greek Parliament approved a 2nd bailout loan agreement with a vast majority of 213 votes out of 300.  Greece has received the first €7.5 billion ($ 9.9 billion) of aid from the EU and International Monetary Fund (IMF) bailout, with the bulk of the payment going to repay bonds held by the Eurozone's central banks. Last week the International Monetary Fund and Greece's Eurozone partners approved a second €130 billion ($172.15 billion) rescue to keep the debt ridden country afloat through to 2014.

Meanwhile, Troika calls Portugal's fiscal adjustment 'remarkable' as it continues to exceed best opportunities and estimating that the goal of a 4.5% deficit is still valid and ‘on track’ and is showing 'no sign of weakness'.  The cost of borrowing for Portugal shows a slight decrease, as 10-year yields were down 84 bps to 12.71%. Meanwhile, Spain and Greece also saw their borrowing costs decrease at short-term debt auctions whilst the Spanish Treasury managed to sell €5.05 billion worth of 12- and 18-month bonds at average yields of 1.418% (vs 1.899%) and 1.418% (vs 1.899%).

United States, previously owned home sales rose in February to an almost two-year high. Adding to signs of stabilization in the real-estate market, purchases climbed 0.9 percent to a 4.61 million annual rate, the fastest since May 2010 from a 4.57 million pace in January which is a positive that has helped strengthened the USD.

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