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BLOG: More money for banks

Has there ever been a more critical pre-budget announcement?

And speculation is mounting about what lies in store in next week’s report.

Most of the national papers are in agreement that we can expect to see a huge swathe of tax cuts.

The cuts are expected to see around £10 billion to £15 billion put back in the pockets of mainly low and middle income families.

The intention is to get money quickly to the people who will spend it, helping to stimulate the economy.

But in the increasingly uncertain economic climate it seems equally, if not more likely, that most people save their little extra windfall.

Indeed, as The Telegraph reported, a similar scheme in America earlier this year failed to have the intended impact as many people put the cash in the bank.

The big hope across the construction industry is that the pre-budget report will get the banks working with businesses again.

Chancellor Alastair Darling is said to be becoming increasingly exasperated by the banks and may use “a nuclear option” to force them to lend to small firms.

According to the Daily Mailthe outcome of the pre-budget report could be critical as to whether we see further interest rate cuts before Christmas.

Whatever happens, the Government is facing the tricky task of stimulating an economy with falling tax revenues and rising public debt.

The Independent’s Steve Richards has likened the political choreography of the recession to Strictly Come Dancing.

He says we have had the clumsy footwork of the Conservatives, the recovery of Gordon Brown after being the most awkward figure on the dance floor, and the desperate lunges from the Liberal Democrats in an attempt to get noticed.