THE weekly task of dissecting difficult stock markets has for one week at least been pushed aside by today's Budget.

At the time of writing I am left to deal with conjecture and not reality, though at best the stock market will receive a mixture of positive and negative messages from Mr Brown's statement.

In positive terms, the long shot is the abolition of Capital Gains Tax, which arguably costs as much to collect as is collected. However, with a recently introduced set of complicated new tax rules including taper relief, the Chancellor is unlikely to backtrack so soon.

At best, the Chancellor may reduce or remove the existing half per cent stamp duty charge on share purchases. In market speak, this will reduce transaction charges which in turn increases market efficiency and in theory everyone wins. For those approaching retirement there should also be some positive news regarding annuity rules.

The Budget should also herald the loosening of the Government's purse strings with the potential for a further giveaway of up to £3bn. A widening of the ten per cent tax band is the most widely anticipated move.

Such a measure may prove negative for stock markets in the short term, as tomorrow's monetary policy committee meeting will need to remain prudent.

Its quest is to control inflation, and any fiscal loosening from the Government is likely to postpone a further cut in interest rates. This will however allow the committee to consider further evidence of the scale of economic slowdown in the US.

Finally, some of you may not care to remember but this week is exactly one year since the technology bubble burst. The technology dominated NASDAQ market peaked at above 5000 and today hovers above 2000 though it is perhaps too early to call it the bottom.

John Pearson - Associate Director

l Gerrard is regulated by the Securities & Futures Authority. Share prices and the income from them can go down as well as up. Readers are advised to seek professional investment opinion before entering into dealings in securities mentioned in this article, which may be unsuitable in their personal circumstances.