George Osborne enjoyed several laughs at Ed Miliband’s expense during his speech, but they weren’t cheap gags.

In fact, our datablog editor Alberto Nardelli has calculated that the policies behind the jokes cost more than £80m.

Here are some thinktank verdicts on the budget.

From the Resolution Foundation

The latest OBR figures show that real household disposable income (RHDI) will be higher this year than in 2010. However, the Resolution Foundation believes this measure is flawed as it includes things people wouldn’t usually consider income, such as imputed rents, as well as the incomes of universities and trade unions. By updating its preferred measure of household incomes, the Foundation finds that average incomes remain around 4 per cent below their pre-downturn peak and are still some way below their 2010 level.

Resolution Foundation analysis of the latest OBR figures shows that typical weekly earnings are expected to rise to £452 (in 2015 prices) by 2020, just short of their pre-downturn peak (based on CPI). However, using its own RPI-J forecast, the Foundation expects the weekly wages of a typical worker to increase by £17 a week by 2020, leaving them still some way short of their pre-downturn peak.

From the Social Market Foundation

The proposal to make income from savings tax free for those earning below the higher rate tax threshold is eye-catching but the benefits are illusory. A large proportion of the population have no savings (29%). At a household level, for those that do have savings, the average in non-ISA savings accounts is £4,000. If this amount was saved in a typical instant access account, the new tax allowance would save someone less than £5 a year.

The problem with this reform is not so much that they make ISAs entirely redundant, but that they appear to do so. This reform could damage the ISA and the positive effect the product has on savings levels. As recent research from the SMF showed, the ISA wrapper acts as a way of encouraging saving because it is highly visible, widely marketed and because the annual deadline acts as a trigger to encourage saving.

Social media users have been having fun with this morning’s Treasury photo op:

George Osborne may have sounded confident today, but the bottom line is that the strategy laid out in 2010 has flopped, writes economics editor Larry Elliott:

The economy has grown much less than expected, and deficit reduction has been much slower than forecast. Borrowing this year will be £90bn, two-and-a-half times what was pencilled in five years ago.

The government’s failure to rein in the deficit means that cuts in public spending – and deep ones at that – will continue for the first three years of the next parliament. Tax increases are also likely.

Today’s budget didn’t include any fresh measures on individuals who work in the UK but are domiciled abroad for tax reasons.

Those “non-doms” will be breathing a sign of relief, says David Kilshaw, head of private client tax at accountancy firm EY, even though the remittance charge paid by long-term residents is going up (as announced in the autumn statement):

Kilshaw explains that these higher charges could be dodged:

“The RBC will increase from £50,000 to £60,000 for those resident here for 12 years or more and a new £90,000 charge will be introduced for those who have been here for 17 years.

“The new charge may see the rise of the “Boomerang-Dom” - those who leave the UK for a few years to restart their clock in order to benefit from the remittance basis without paying the new higher charges.”

Forecasting is a tricky business, especially when it comes to budgets, as the OBR flags up on page 202 of the economic and fiscal outlook.

Savers make up many of the winners from today’s budget, says our Money editor Patrick Collinson.

But people who file self-assessment tax returns might become losers without even knowing it, if the move to digital filing goes wrong.

Kay Ingram of financial planners LEBC said:

“The proposal to scrap the annual tax return may appear to be welcome news, but it could leave taxpayers worse off.

“At present over 25% of tax codes are incorrect. Without a mechanism for taxpayers to report their actual income and gains and to claim reliefs due, many taxpayers could end up paying more in tax than is due.”

George Osborne’s decision to allow pensioners to unlock their annuities could be bad news for people looking to buy their first home.

Nick Breton, Head of Direct Line for Business, explains:

“People already in retirement can now join the pensions freedom party.

Research shows a third of those aged 45 to 64 with a pension would consider accessing these funds to purchase a buy to let property and today’s announcement allows those already retired to follow suit, swapping their annuity for a fixed lump sum they could put into a buy to let investment.

Britain’s ranks of ‘silver landlords’ could increase significantly following the change in regulation, which offers more freedom for those in retirement.

So, increased competition for properties could undermine the benefit of the new first time buyer Isa.

Here is some reaction to the budget from political parties, the TUC and the CBI.

From Nigel Farage, the Ukip leader

This government has evidently failed in it’s promise to the British people to eradicate the deficit and whilst it took Labour 13 years to double the debt this government has done it in five.

Mr Osborne talks about a long-term economic plan, today he pushed all his targets back and created a long grass economic plan.

From Natalie Bennett, the Green party leader

This final Coalition budget offers little hope to the many millions of people across Britain who are struggling to get by. Austerity economics has failed.

Incomes are still lower than they were in 2010, household debt is up and inequality continues to plague this country. In the world’s sixth-biggest economy, people should not have to queue at food banks or work in insecure jobs that don’t pay enough to get by on.

From John Swinney, Scotland’s deputy first minister

Today’s measures are a glaring admission by the chancellor that his policy for the North Sea has been wrong and the poor stewardship by the UK Government has had a detrimental impact on our oil and gas sector and the many people who work in the industry. It has taken the Chancellor four years to admit the tax rise he implemented in 2011 was a mistake. A heavy price has been paid for this mismanagement.

From Frances O’Grady, the TUC general secretary

The chancellor’s Britain, where happy people skip to their secure jobs to celebrate their rising living standards, is not one that many will recognise.

But it’s what he did not say that is most significant. He did not spell out where, if re-elected, he will make the huge spending cuts he plans for the next parliament, nor did he tell Britain’s low-paid workers which of their benefits he will cut.

From John Cridland, the CBI director general

Stability and consistency are what businesses need to grow and prosper. This Budget sets the tone, providing a clear plan for fiscal health and growth. This budget has some encouraging measures to help businesses create jobs for the benefit of all.

Help-to-buy Isas won’t push up house prices, the OBR thinks. This is from its report.

To the extent that this supports prospective first-time owner-occupiers relative to those looking to buy-to-let, then it is possible that the measure will lead to a change in the composition of transactions towards first-time buyers, although the effect on aggregate property transactions is unclear. In supporting overall demand for housing, it is also possible that the policy will add to house price growth, although given the scale of the scheme we would expect any effect to be negligible. We have therefore not adjusted our forecasts for housing transactions and house prices for this measure.

Peter Spencer, chief economic advisor to the EY ITEM Club, reckons the Office for Budget Responsibility is actually being too gloomy in its new forecasts.

He says it hasn’t fully recognised the fall in commodity prices and the recovery in the eurozone:

The OBR’s 0.1% upward revision to 2015 growth looks very small in the context of these developments. In particular, the collapse in the oil price has caused a substantial upward revision to the forecast for household income growth. Yet the forecast for consumer spending growth has been revised down, leaving the saving rate well above 7%.

Similarly most forecasters are becoming more optimistic about the prognosis for the Eurozone, particularly since the ECB launched its QE programme, but the OBR’s forecast remained downbeat.

Spencer reckons the forecasts of 2.5% growth this year will be exceeded, perhaps “by some distance”.

Newsnight’s Duncan Weldon agrees:

More from the OBR briefing:

The jump in government spending now expected in 2019-20, which will avoid a return to 1930s levels, is the equivalent of the Ministry of Defence’s annual budget!

Ed Balls, the shadow chancellor, told the BBC that, despite Osborne’s decision to cut pension tax relief, using some of the money Labour had earmarked for its tuition fees cut, Labour could still go ahead with its policy.

Balls also dismissed the budget as “hubristic”.

There is still little sign that Britain’s productivity is picking up:

In his speech Osborne announced a review of the use of deeds of variation. This sounded like a policy entirely announced to give him the opportunity to take a dig at Ed Miliband (whose mother used one some years ago).

The accountancy firm KPMG has criticised Osborne for this. This is from Dermot Callinan, a KPMG, a tax partner.

By identifying deeds of variation (DOV) as “tax avoidance” the Chancellor has focused on the potential tax consequences for those who undertake tax planning. There are many cases where variations are used simply to correct tax mistakes or use business and agricultural allowances on death, where a widow and other family members of the deceased want to make a change so that the estate can go to somebody else.

Without DOV, executors will have to resort to the Courts who will become busier with “mistake” applications along the lines of the cases of Pitt-v-Futter and negligence claims against family solicitors.

It is a shame that something that has been around for generations to enable the straightforward handling of estates between families has been questioned as a mechanism for tax avoidance.

OBR chief Robert Chote begins today’s briefing by saying the budget looks “pretty neutral”, meaning the chancellor has given with one hand, and taken with the other.

Chote also confirms that low inflation (and cheap oil) should stimulate the economy:

Paul Johnson, director of the Institute for Fiscal Studies, has just been commenting on the budget on the BBC. Here are the key points he made.

• Johnson criticised both parties for not giving more details of their proposed spending cuts. He was particularly critical of the Conservatives for not being able to flesh out what their welfare cuts would involve.
  

It would be much nicer if we were told where they were going to come from. The electorate could have a much clearer sense of what was going to happen ...

It is a terrible shame we are going into the election with these big numbers being bandied about, on both sides, without any detail about actually how that is going to be achieved. The chancellor has been talking about £12bn of welfare cuts for probably two years now. We don’t know anything more about where they are going to come from.

• He expressed reservations about the way the plans assume a big increase in spending in 2019-20. This is the wheeze George Osborne has used to avoid the charge that he is planning to cut spending to 1930s level. (See 2.34pm). The OBR says the spending increase planned for 2019-20 would be “the biggest increase in real spending for a decade”.
  

The OBR very pointedly referred to it [the big cuts in 2016-17 and 2017-18, followed by the increase] as a rollercoaster, the very first page of that document refers to that as rollercoaster for public service spending. It is clearly easier and better if you do this in a more smooth way.

• He said the planned cuts for first two years of the next parliament were “very substantial indeed”.
  

In the City, the FTSE 100 has jumped by 100 points to 6,938, not too far from its record closing high.

Shares in housebuilders, energy firms, investment groups and drinks makers have all gained ground on the back of Osborne’s various announcements.

The OBR also predicts that monetary policy will remain “very loose”, with the Bank of England leaving interest rates unchanged until mid-2016.

The OBR has cut its forecast for house price growth over the next two years, but warns that getting on the housing ladder will then get even harder:

And here’s why:

House price growth is stronger in the second half of the forecast reflecting stronger growth of real income per household. House prices rise faster than earnings for most of the forecast period thanks to the lagged effect of past falls in mortgage interest rates and the fact that household income growth has historically had a more than one-for-one impact on house prices.

It’s not been a great budget for the bookmakers.

Ladbrokes is nursing the biggest single loss for a budget bingo wager in its history, having offered 10/1 that Osborne would make a “two kitchens” joke.

It also offered 4/1 that the chancellor would say “we’re all in this together”. Which he duly also did.

Punters who backed those two options have cost it almost £20,000, insiders say.

Another chart showing how government spending is now forecast to rebound by the end of the next parliament:

Here’s the Treasury’s fact sheet on help-to-buy Isas

The government will provide £50 per month for every £200 someone saves, up to a maximum of government payment of £3,000. People will only be able to use this for a first home, and one that they will live in. It is available for homes worth up to £250,000, or £450,000 in London and the government money only gets handed over at the point the purchase. But a couple buying a home together can both get their £3,000. The Treasury expects 60% of first-time buyers to use the scheme, and by the end of the decade it is expected to cost £835m a year.

Richard Murphy, the tax campaigner, is very critical.

This was a very busy budget, with lot of things in it that may or may not be politically effective, says former chancellor Lord Lawson on Sky News now.

But the important issue is how the economy is faring.

And while Britain’s growth isn’t spectacular, compared with other countries we’re doing about the same as the US and better than other major economies, Lawson points out.

The Office for Budget Responsibility’s new, independent assessment of the UK economy is now online:

Economic and fiscal outlook – March 2015

Details to follow....

We can now see the impact of all Osborne’s tax and benefit changes since 2010 on the rich, the poor, and everyone else:

That’s from the Treasury’s distributional analysis, online here.

You can see the full budget, and Osborne’s speech, on the Treasury website:

Budget 2015

Labour is sticking to its plan to cut tuition fees to £6,000 per year, Miliband says, and make Nick Clegg answer for his broken promises on the door step.

(Labour had planned to fund the commitment by restricting pension tax relief, an idea which Osborne has now lifted himself)

Miliband says there is a “glaring omission” in today’s budget speech - the National Health Service.

And that’s because the government is planning “massive” cuts in the next five years to pay for the changes announced today.

Shares in investment groups have climbed after Osborne’s new savings proposals, with St James Place and Hargreaves Lansdown are both up 3.6%.

Meanwhile Johnston Press has risen 2.5% on news of a consultation on local newspaper taxation.

And the cut in alcohol duty has helped drinks group Diageo climb 25p to £19.35.

The chancellor shouldn’t be crowing about halving the deficit in this parliament [from 10% to 5% of GDP], says Ed Miliband - he’s failed in his aim to eliminate it.

Those jibes about Miliband’s two kitchens, and his mother’s use of inheritance tax, may have stung.

The Labour leader says he won’t take lessons from “Trust Fund chancellor and the Bullingdon prime minister”.

There’s a swipe at the junior coalition partners -- the Liberal Democrats are “locked in the boot” of the Conservative party.

And on details -- Miliband says Osborne has failed to clamp down on stamp duty avoidance by hedge funds.

Snap political verdict: That was flash. We’ll need to look at the details to see what they amount to, but Help to Buy ISAs, with the government putting in £1 for every £4 you save, is clearly going to go down well with potential first-time buyers, and the new personal savings allowance sounds like a generous bung for the Daily Telegraph classes. On the macro picture, what was most significant was George Osborne’s decision to scale back the autumn statement’s “Road to Wigan Pier” austerity forecast. His raid on pension tax relief may limit Labour’s options, and letting Manchester keep its extra business rates revenue was a clever excursion into Labour territory. But we need to look at the detail. We’ll get going on that now. AS

Ed Miliband is now responding to George Osborne.

He says the budget “won’t be believed” by the public, and accuses the chancellor of inventing a new measure of living standards.

People will be earning less at the end of this parliament than at the beginning, for the first time since the 1920s, says the Labour leader.

And Miliband has also prepared some statistics: there are more zero hours contracts than the population of Glasgow, Leeds and Cardiff put together. Hardly a sign that we’re all in this together.

Osborne says he cut beer duty last year for the second year in a row. The industry said that created 16,000 jobs.

• Beer duty to be cut by 1p on a pint. Cider duty to be cut by 2%, and Scotch whisky duty by 2%

• Fuel duty increase scheduled for September to be cancelled. Osborne says his fuel duty cuts have saved the average family £10 when they fill up car
  

Shares in oil companies had been moving higher in recent days on hopes of tax breaks in the Budget, and they have duly arrived, giving the sector another lift.

With £1.3bn of support for North Sea production announced, Tullow Oil is up more than 1%, Premier Oil is 1.5% better and Enquest has added 3.6%.

Meanwhile Royal Dutch Shell is 1.8% higher, Nick Fletcher reports.

Does the chancellor decide the policies and then think up the jokes, or the other way round?

Osborne says people want their taxes to be simple to pay.

• Class 2 national insurance contributions for the self-employed to be abolished in the next parliament.

• Annual tax returns to be abolished altogether. This will be “a revolutionary simplification of tax collection,” he says.
  

Corporation tax will be cut to 20% in April, he says.

Labour wants to put this up. It would be the first increase since 1973. That would be a job destroying measure, he says.

The current system of business rates needs to be reformed. A far-reaching review will be carried out, he says.

Osborne says he wants to expand ultra-fast broadband to almost all the homes in the country.

And there will be support for the internet of things.

So - to use a completely ridiculous example - were someone to have two kitchens they would be able to control both fridges from the same phone.

Osborne says TV and film tax credits are to be made more generous. There will also be support for the video games industry, and a new tax credit for orchestras.

Osborne says a comprehensive transport strategy will be funded for the north.

A new city deal will be struck with the combined West Yorkshire authority.

And Greater Manchester will be able to keep 100% of the extra revenue from increased business rates as it grows.

The same deal will be offered to Cambridge, he says. And he is open to the same offer for other areas.

He says measures are being introduced to improve transport in the south.

Wales will get more power, and work is underway on a Cardiff city deal.

He will back the Swansea tidal power proposal.

And cuts to tolls on the Severn bridge will be introduced from 2018.

In the City, bank shares have come off their best levels after the chancellor announced measures to raise £5.3bn from the sector.

Market reporter Nick Fletcher explains:

The rate of the bank levy will be raised, and banks will be stopped from deducting PPI compensation payments from corporation tax.

Lloyds Banking Group, weak already on the prospect of the government selling another £9bn stake, is down 0.6% while Barclays and Royal Bank of Scotland have slipped back from earlier highs.

Overall the FTSE 100 is up around 60 points or 0.88% after the revised economic growth forecasts, marginally better than when the chancellor began speaking.

Osborne says new funding will be available to address housing shortages in London.

Osborne announces measures to help the services, including funds for Battle of Britain memorials.

Blood bike charities do a great job. They wil be exempt from VAT.

Some £1m will be available for defribillators.

More money will be available for church roof repairs.

And he wants to mark the 600th anniversary of Agincourt. Shakespeare referred to that as a victory for a “band of brothers”. That is not an option for Labour, but it was a victory against an opposition in alliance with the Scots. It is worth spending money marking it, he says.

Opportunity has increased, Osborne says. More people from disadvantaged backgrounds are going to university.

Extra funding for child mental health services is included in the budget.

• Share of tax coming from top 1% up for 25% in 2010 to more than 27% now, Osborne says.
  

He says lower earners are paying a lower proportion of income tax than before. He will not acccept lessons in fairness from Labour.

Osborne says he needs to commit to the fiscal plans set out in this budget to keep national debt falling.

After all the hard work of the last five years, it would be a tragedy to reverse this.

So further savings worth £30bn need to be found, he says. He is clear how this can be done: £12bn from welfare, £13bn from departmental budgets, £5bn from tackling tax evasion.

He says today’s distributional analysis shows that the rich will pay the most, as they have in all the coaliton’s budget.

• Surplus planned for 2019-20 cut from £23bn to £7bn

Osborne says Britain is out of the red, into the black, and paying its way in the world.

• State spending to fall to the level it was in 2000 by 2019, Osborne says.
  

This counters the Labour claim he would cut spending to 1930s levels.

Osborne turns to debt.

Welfare payments are £3bn lower than forecast at the time of the autumn statement, he says.

• Osborne announces sale of £13bn of mortgage assets from Northern Rock and Bradford and Bingley to be sold.

• Lloyds Bank assets worth £9bn also being sold.
  

Osborne says he won’t treat this as a windfall, even though some of his predecessors would have done that.

Instead, the income from the bank sales, plus lower welfare payments, plus the savings from lower charges on gilts, will be used to pay down the national debt.

Osborne confirms that a new pound coin will be created. The 12-sided coin will include emblems for all four UK nations.

Osborne says he has repaid debt issued by figures like Gladstone and Goschen.

The debt created by Gordon Brown will take longer to pay off, he says.

Those growth forecasts aren’t quite as positive as some economists had expected. GDP will be a little higher this year and next, but a little lower in 2017.

Here’s the details:

• 2015: 2.5%, up from 2.4% in last December’s Autumn Statement
  
• 2016: 2.3%, up from 2.2%
  
• 2017: 2.3%, down from 2.4%
  
• 2018: 2.3%, unchanged
  
• 2019: 2.4%, up from 2.3%

Osborne says he can afford real increases in the national minimum wage.

By the end of the decade it will be more than £8.

And the apprentice rate has gone up by the biggest amount ever.

Osborne says living standards are up since the election.

GDP per capita is up 5%, he says.

And living standards are also up on the real household disposable income per capita measure, he says.

Osborne says most jobs being created are skilled, and full-time. And the new jobs are not just in the south. Yorkshire has created more jobs than France.

Osborne says oil prices are falling.

The OBR has revised down the growth of the world economy, the growth of world trade and growth in the Eurozone.

It says the threat posed by the Greek crisis is serious. He urges the eurozone countries to resolve it.

Much interest in the chancellor’s claim that living standards have risen over this parliament:

Osborne says the OBR has confirmed Britain grew by 2.6% last year.

Some people want him to follow the French approach. But he will follow the secretary general of the OECD who said Britain had a long-term economic plan and should stick to it.

Lindsay Hoyle, the deputy speaker, appeals for quiet. He is struggling to hear Osborne, he says.

(He hasn’t missed much so far.)

Osborne says, again, he is choosing the future.

He wants the UK to be the most prosperous economy in the world. He chooses business and jobs, and the whole nation. We choose responsibility, he says. We choose aspiration, we choose families.

This takes Britain one more “big step” on the road from austerity to prosperity.

Osborne says the critical choice is whether to return to the “chaos” of the past, or to carry on recovering the economy.

Any extra money will go on addressing the deficit.

Osborne says he reports on a Britain that is growing, creating jobs and paying its ways.

We took difficult decisions ... and it worked. Britain is walking tall again.

Britain grew faster last year than any other major economy.

More people have jobs in Britain than ever before.

Living standards will be higher than in 2010.

The deficit has fallen by a half.

And bank shares are being sold, and taxpayers’ money recovered.

Labour’s Ian Lavery says many families in the north east are being hammered. Life expectancy is 10 years lower than in the rest of the country. Cameron should apologise.

Cameron says the claimant count has fallen in Lavery’s constituency by 28% over the last year. Youth unemployment has fallen even more.

Labour MPs tell him to calm down. But he can’t calm down when he sees the success his long-term economic plan is generating.

John Howell, a Conservative, praises the government’s long-term economic plan.

Cameron says the UK has seen the largest rise in employment of any G7 country in the last year. More young people have got into work in the UK in the last year than in the rest of the EU put together.

Cameron says the minimum wage lost value after the Labour recession. Now it is going up. And it is set to reach more than £8 by the end of the next parliament. So Labour’s plan to lift it to £8 would amount to a cut, he claims.

Labour’s Fiona Mactaggart says is cancer waiting times were met in Doncaster (see 12.07pm), it is because they have a very effective MP. But nationally cancer waiting referral targets have been missed in the last four quarters. What would Cameron say to the people affected.

Cameron says cancer survival figures are going up. More people are being referred for treatment. In Mactaggart’s constituency the targets are being met. They have an effective MP too.

This is quite fun.

Miliband says Cameron broke his promises on waiting times, reorganisation, cancer treatment and A&E. Why should anyone believe his NHS promises?

Cameron says people can trust him because the economy is strong. Miliband has not even mentioned the employment figures, he says. Miliband says the NHS cannot survive another five years of Cameron. It will only be save under Labour.

Cameron says there is only one government in history that cut the NHS - the Labour government in the 1970s. And it did so because it lost control of the economy. Miliband has made misjudgment after misjudgment. Security will be on the ballot paper in 50 days time. People will never trust Miliband.

Miliband asks why Cameron broke his promise on cancer waiting times.

Cameron quotes cancer waiting times for Doncaster. The targets were met for people seeing a doctor, and beginning treatment. If Miliband cannot stand the heat, he ought to get out of his second kitchen.

Miliband says Cameron promised a bare-knuckled fight to stop A&E closures. But they did not stop. Why did he break that promise?

Cameron says Miliband once stood at PMQs with a list of 27 A&E units that were shut. But some were shut under Labour. That is how incompetent he is.

Ed Miliband says Cameron promised no top-down reorganisation of the NHS before the election. Was this an “over denial” or a broken promise?

Cameron says he made took the bureaucracy out of the NHS. And he put more money in. Ed Balls says he wants to be in the kitchen cabinet. But he does not know which one to turn up to.

Miliband says at least he paid for his kitchen, unlike Michael Gove. Cameron says he would not go back to the days of NHS waiting. But waiting times are going up. Why did he break that promise.

Cameron asks which kitchen Miliband paid for. Miliband literally does not know where his next meal is coming from. On the NHS, he is putting more money in, he says.

Labour’s Ian Murray says George Osborne said in his first budget we’re all in this together. Did he dream up this soundbite before he proposed a £42,000 tax cuts for millionaires?

David Cameron says a record number of people are in work. In Murray’s constituency, the claimant count has fallen by 49%.

Here’s the BBC’s Allegra Stratton on suggestions that George Osborne might increase the national insurance threshold.

Some more budget trivia - the length of George Osborne’s previous budgets. This is from the Press Association.

2010: 54 minutes
2011: 56 minutes
2012: 58 minutes
2013: 54 minutes
2014: 55 minutes

Since 2010, the government has done a better job of lowering spending (as a share of the economy) than raising revenue, the Guardian Datablog team flag up:

This is what the prime minister’s spokesman said about Osborne’s budget presentation at cabinet this morning.

I think you will see a very strong package of measures and that view was shared right around the table. There was a clear expression of views from around the table that it was a good and strong package.

Some more budget trivia.

The CBI wants George Osborne to devote more help to working families (funds permitting, of course):

Back in the financial markets, the pound has hit a new five-year low against the dollar at $1.4661, down almost one cent.

Traders are pinning some blame on this morning’s unemployment data. Although employment hit a record high, the weaker-than-expected wage growth means the Bank of England is less likely to raise interest rates anytime soon:

To what extent does the state of the economy affect a government’s chances of re-election? There is a good essay on this subject in Sex, Lies & the Ballot Box, and in it David Sanders says there is a link, but that what matters is how well voters expect their individual circumstances to improve in the future.

The potential connection between people’s economic perceptions and their voting choices generated the second area of academic interest – what is often called ‘economic voting’. Distinctions were made between people’s perceptions of their own and their families’ interests (‘egocentric’ evaluations) and their broader views about the interests of the economy in general (‘sociotropic’ evaluations). Forward-looking (‘prospective’) evaluations were also distinguished from backward-looking (‘retro- spective’) ones. Different academic observers stressed different sets of perceptions, but in Britain it was often found that prospective egocentric evaluations or ‘personal economic expectations’ correlated most strongly with voting preference. In other words, it was how people thought the economy would do in the future that mattered, not how things had gone in the past; and it was what the government would do for you and your family that mattered, not any judgement about the country as a whole.

The correlation does not always apply. As this graph shows, there are times, such as the mid-1990s, when people can be positive about their future, but very negative about the government. But often the two measures follow each other closely. The black line shows personal expectations, and the grey line shows government poll ratings. It runs from 1979.

George Osborne has been tweeting. Here’s the new pound coin he is introducing.

And here’s his (rather bland) budget mission statement.

Shabana Mahmood MP, the shadow exchequer secretary, has denied that Labour’s plan to cut tuition fees could be scuppered by the budget.

She just told Sky News that Labour will “still have a fully funded proposal to cut tuition fees to £6,000 per year”, even if Osborne reduces pension tax relief, as rumoured.

David Cameron has just left Downing Street and headed to parliament ready for PMQs, and then the budget, looking pretty cheerful:

Vince Cable, the Lib Dem business secretary, told BBC News this morning that there would “not be a spectacular giveaway” in the budget. That begs the question, obviously, what an unspectacular giveaway would look like.

Economists at Royal Bank of Scotland have tweeted five key points to watch out for:

While Sky News flag up one budget tradition - the chancellor is allowed a mid-speech tipple:

(click on the picture to make it play)

Here’s Rachel Reeves, Labour’s Shadow Work and Pensions Secretary, on this morning’s unemployment data:

“Today’s fall in overall unemployment is welcome, but working people are still £1,600 a year worse off since 2010, showing the Tory plan is failing.

“After five years of David Cameron the number of people paid less than a Living Wage has risen by 44%, and nearly half of all the new jobs created have been in low paid sectors. It’s five years of Tory failure on low pay.

“Labour’s better plan for working families will raise the minimum wage to at least £8 an hour before 2020, and give tax rebates to firms who pay a Living Wage. A Labour government will create more well paid and secure jobs, build more homes, extend free childcare for working families and guarantee apprenticeships for everyone who gets the grades.”

Here are two good pre-budget articles in the papers today that are particularly interesting.

• Lord Lawson, the Conservative former chancellor, says in the Daily Telegraph that Osborne should raise petrol duty to fund a cut in income tax.
  

Although I do not expect him to do this, he could greatly increase his scope to reduce income tax by raising the petrol tax. This has been – in my view unwisely – frozen since the government took office. But with the recent collapse in the oil price, an increase of, say, 5p a litre, which would bring in some £2 billion a year, has much to be said for it ...

The most important reason for collecting an extra £2bn from the petrol tax is that, coupled with the likely strengthening of the public finances, and some further public expenditure savings, it would give Mr Osborne the scope to cut a penny of the basic rate of income tax. The economic benefit would be significant, and the political impact massive, as I discovered when I took a penny off in 1986 – the first such reduction for seven years. Alas, this is unlikely. The practice of negotiating the Budget with the Liberal Democrats, which has caused budget-making to be such a nightmare during this parliament, means that any scope for reducing income tax will be frittered away in a further rise in personal allowances.

He also says that winter fuel payments should be abolished.

[Osborne] could decide that the elderly are aware that they use more fuel in winter, and should not be patronised by being given a winter fuel payment, as if the onset of winter always takes them by surprise. This should be done by replacing the winter fuel payment with an equivalent increase in the basic pension – which is, of course, taxable; thus ending, in the simplest possible way, the nonsense of the rich receiving a tax-free Christmas present from the state, and making a modest improvement to the public finances at the same time. Sadly, I don’t expect to see this desirable reform implemented just yet, but its day will surely come.

• Daniel Finkelstein in the Times (paywall) says the budget won’t decide the election.
  

Economic policy is, naturally, central to the outcome of elections. But budgets held immediately before campaigns are not.

Why is this? Well, to start with, voters don’t pay much heed to political announcements and what they do hear, they often don’t believe. Many pre-election budgets are simply held too late to make any difference. Any boost to income from today’s Budget might be felt very faintly in one month’s pay, if that.

Budgets deal with tax and spending but this only accounts for part of the income of voters. Mortgage rates, for instance, are more important than tax rates to many households. So even quite enthusiastic budgets often make only a small overall impact.

When polling is done on the impact of cuts, voters often spontaneously talk about cuts in their living standards rather than cuts in public spending. This suggests that budget announcements often mean something quite different to politicians than to most members of the public and an announcement that seems impressive to the one may leave the other cold. In addition, although governments can borrow, they cannot simply create wealth out of thin air.

Paul Kenny, general secretary of the GMB union, is less impressed by today’s unemployment report, arguing:

“The economic recovery under way should be much further ahead than it is.

The 3.2 million increase in population since 2007 has led to additional economic activity in the UK, as would be expected. The new jobs being created are mainly low-skilled, low-paid and very precarious jobs. Even skilled workers in the UK face being undercut while wages are stagnant or falling in real terms.

Most workers have seen little or no evidence of any recovery in living standards based on investment and productivity gains.”

Jeremy Cook, chief economist at the international payments company, World First, is worried that wage growth has slowed:

“Well this is rather disappointing. The jobs market has been a consistent positive for the UK economy through the past 18 months and although jobs are still being created, the rate of expansion and the impact on wages is starting to diminish.

This recovery in UK jobs is something that will be lauded time and again while Osborne is at the Dispatch Box later on but, looking forward, these falls in unemployment are worth little if wages are not increasing too.”

Here’s business secretary Vince Cable’s take on the jobless data:

“Today’s employment figures are a historic moment. With almost three-quarters of working-age people now in work, we have achieved the highest rate of employment in the UK since records began.

“This is a sign that the long-term decisions the Liberal Democrats have taken in government have created a more resilient economy.

George Osborne has hailed the news that Britain’s employment rate has hit a fresh record high (of 73.3%) in the last quarter:

“Today’s ONS figures record yet another economic milestone, confirming a new record high employment rate alongside a claimant count that has not been lower since 1975. This good news is further proof that the government’s long term economic plan is working and that British families are seeing the results with regular wages rising more than five times faster than prices.

But in an uncertain world economy all of this progress will be at risk of collapsing back into chaos unless we carry on working through the plan that is delivering stability and rising living standards.”

The prime minister adds:

Here are today’s YouGov GB polling figures.

Here’s another shot from outside No 11 this morning.

And here are Danny Alexander, the chief secretary to the Treasury, and Nick Clegg arriving at Downing Street this morning for the pre-budget cabinet.

The Treasury has claimed that moving Britain to a brave new world of digital tax accounts will mean less work for millions of us.

But Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants, warns that taxpayers face a learning curve:

“Many of those filing paper self-assessment forms are self-employed people and those running small businesses who have been using the postal method for many years. They need to be given access to resources which help them move the process online to ensure they aren’t left behind.

“Today’s announcement by the Chancellor is part of the Government’s push to get the tax payer to do more as HMRC’s resources continue to be squeezed by 5% cuts year on year.”

Our economics editor Larry Elliott has expertly deconstructed a George Osborne budget speech - you don’t want to miss it:

Five stages of a George Osborne budget speech - video

George Osborne will probably declare that the UK was the fastest growing economy in the G7 last year.

The data suggests he’s right, but the International Monetary Fund also reckons the US will overtake Britain this year in the growth stakes:

Here’s Angela Monaghan’s list of the charts you need to see before the budget.

The financial markets are calm ahead of the budget.

The pound is hovering around $1.475 against the US dollar and the blue-chip FTSE 100 index has inched up by 22 points or 0.3%.

While the City will be watching the budget closely, investors are more concerned about May’s general election.

Mark Ostwald of ADM Investor Services explains:

Eminently being a pre-election budget, any measures that are announced are rather moot given a very uncertain election outcome.

As such Osborne’s speech will primarily be about “talking up” what the government has achieved on the economy, and probably trying to distract from some of the very tough decisions on spending and taxes which will need to be implemented by the next government, given that the UK’s budget deficit remains very large.

And in the Commons, MPs have been queuing up so that they can grab a seat for the budget statement. They do this by putting what’s called a prayer card on a seat when the doors open, allowing them to reserve it for later. They do this because there are only 427 seats in the chamber, even though there are 650 MPs.

Here are some pictures from outside No 11 this morning.