Osborne announces tax and spending cuts.

The Chancellor of the Exchequer George Osborne announced the UK annual budget yesterday. He assured that tough austerity measures will be implemented despite calls to ease the program of reductions, as it is crucial to retain bond market confidence and UK’s current AAA credit rating.

His plan involves simplifying the British tax system in order to reduce the deficit, as government expenditure almost doubled in February. The chancellor proposed such solutions as the reduction of the top rate of the income tax from 50% to 45% in April 2013. He also cut corporation tax which will decrease to 24% in April this year and then to 22% by 2014.

Minutes from the MPC were also released before the budget. A split of 7-2 was sustained to keep QE on hold at current levels but the risk of inflation staying high remains as oil prices are consistently rising. The 0.5% interest rates were held for three years in a row.

The German government unveiled its 2013 budget project, in which it pushes for a quicker consolidation of finances than initially established. According to the plan presented by Finance Minister Wolfgang Schaeuble, the country will manage to cut its deficit substantially by 2014.

In the US sales of all existing homes slipped 0.9% to an annual rate of 4.59 million units in February. Purchases of existing single-family homes declined 1.0% to an annual rate of 4.06 million units. Sales of existing homes fell in the Northeast (-3.3%) and West (-3.2%) but advanced in the Midwest (+1.0%) and South (+0.6%).