Chancellor George Osborne to announce the 2014 Budget this afternoon

Chancellor of the Exchequer George Osborne

Chancellor of the Exchequer George Osborne - Credit: PA Archive/Press Association Images

Chancellor George Osborne will outline his Budget for the year later today as the Gazette goes to press.

Despite house prices rocketing and wage growth looking to potentially outstrip inflation by Christmas, the Conservative Chancellor is expected to maintain the government’s policy of austerity. The message from Downing Street being that it would be foolish to risk recovery with any drastic spending increases.

The Chancellor is expected to grant the Liberal Democrats their wish of raising the tax-free allowance by £500 to £10,500 - something billed by Nick Clegg as a “workers bonus”.

Beer drinkers are expected to be left alone but duty on wine and spirits is set to rise.

Smokers could also be hit with rumours circulating of 28p rises for 20 cigarettes and on 25gms of roll-up tobacco.

The Chancellor has already confirmed that the government’s Help to Buy scheme will be extended to 2020 for people buying new-build homes, at a cost of about £6 billion.

The stamp duty threshold could also be doubled from £125,000 to £250,000.

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Some reports have suggested Mr Osborne could slash 1p off the basic rate of income tax reducing it to 19p - a move that would be worth £160 to those on average salaries of £26,500.

The budget will be officially announced at 12.30pm. Check back here throughout the day for updates and reaction.