Roger Bootle, economic adviser to Deloitte, gives his response to the Budget

• The central player in this budget is something which lies beyond the Chancellor's control - growth. Although he announced a plethora of measures aimed at increasing it, even if these are successful, they will have their effects only in the medium term. Growth in the short term will depend entirely upon aggregate demand and on this the budget had virtually nothing to contribute. For it was broadly neutral, as the cost of its umpteen measures was met by money raised.

• Meanwhile, the economic backdrop remains extremely challenging. It would not be difficult to imagine growth turning out much weaker, and therefore borrowing higher, than in the government's plans. This is particularly true given that higher inflation threatens to tip the MPC into raising interest rates prematurely - at just the time that consumers' real incomes are under serious pressure.
  
• The OBR's contribution to the Chancellor has not been helpful. It has downgraded this year's growth forecast to 1.7% from 2.1%. This seems to be appropriate. (My forecast is 1.5%.) Although this year's borrowing numbers are projected to be £3bn lower than in the OBR's previous projections, this undershoot is at the low end of recent expectations. Moreover, despite slightly faster economic growth, in 2015-16 borrowing is expected to be £10bn higher than previous estimates.
  
• But these higher borrowing numbers do not reflect any backtracking by the government on the pace of cuts but rather the effect of higher inflation on cyclical elements of spending like debt interest and social security. Accordingly, my suspicion is that the markets will be forgiving.
  
• The budget's really bold ambition - to align income tax and national insurance - remains only that. The government will consult but is not yet ready to act. Moreover, in saying that the contributory principle will be preserved the Chancellor seems to be ruling out a full merging of the two.
  
• The various measures affecting petrol duty will lower the CPI inflation rate by 0.14% in 2011/12 compared to what it would otherwise have been. Changes to air passenger duty will also knock 0.1% off inflation, but this will be offset by the rise in tobacco duties which will add 0.1%.
  
• One of the most intriguing parts of the Budget was the announcement that the government intends to build up its foreign exchange reserves. Short of swaps of currencies with other central banks, this can only be done through intervention sales of sterling on the exchanges. This announcement could eventually open the way to intervention to hold the pound down.