The Gladstone Budget box will be used by Chancellor George Osborne for the final time at the June Budget; The iconic red Budget box was made for William Gladstone around 1860, it has been used by every Chancellor since, with the exception of James Callaghan and Gordon Brown. However, the box is in an advanced state of disrepair and experts at The National Archives have advised that continued use of the box could result in its destruction.

The UK prepares  for toughest budget package of tax increases and spending cuts in a generation is expected to be unveiled by Chancellor George Osborne in his first Budget today. He will say the measures - designed to tackle Britain's record deficit of £155bn - will be based on fairness, with the better-off paying more.

UK embarks on long rutted road to cut its deficit: Davy chief economist,  Rossa White, comments  - -"The UK's first emergency Budget of this crisis takes place today. It must be credible. Since the election, it has been notable that the bond market has given the new government the benefit of the doubt: UK long-dated gilts rallied and have been stable for over a month. The new Chancellor must get two things right for a start: outline concrete measures to bring the deficit down this year and produce a transparent plan for 2015 that goes much further than the latest EC council opinion on deficit reduction.

The latest EC council opinion on the UK at the end of April was a rebuke. It said "although the programme (its stability plan update) does set out plans for a fiscal consolidation from 2010/2011, the update does not present a medium-term objective for the budgetary position that would bring public finances on a sustainable path". Today's Budget must correct that problem by delivering a bigger cut in the structural deficit by 2015. In its latest submission to the EC (under the labour government), the UK was looking to reduce its structural deficit by about 1% per annum in the four years to 2015. Today's plan will push up that target by about half a percentage point to 1.5% on average in that period.

It is remarkable that the UK is starting its consolidation fully two years after Ireland pushed through its first (minor) measures to cut government spending. Yet its plan to cut the structural deficit over five years will be similar to what Ireland enacted over 18 months (fiscal consolidation of about 6% of GDP). Despite Ireland's measures, last year's underlying GGB deficits (ex-banking re-caps) were still similar: 11.8% in Ireland versus 11.5% in the UK. One of the two key tests for today's Budget is whether the UK can credibly reduce that number for 2010 (Ireland's is likely to slip below 11%)."

The new UK budget will result in huge amount of unemployment in the public sector, says David Buik, partner at BGC Partners. He tells CNBC's Anna Edwards & Chloe Cho that it is imperative that finance minister Osborne gives businesses incentives to employ people into the private sector:

Economic View: UK takes the Budget spotlight; Goodbody economist, Deirdre Ryan, comments - - "While consolidation of the budget deficit has been underway in Ireland for some time now and more recently in other Euro area member states, today it is the UK that will take the limelight when it delivers its own Emergency Budget. Ireland is all too familiar with the pressures that can be brought about by markets to tackle public finances and while the UK has not experienced such market pressure as yet, a deficit that is heading for 11.5% of GDP this year is certainly one that warrants attention sooner rather than later. Total consolidation amounting to £20bn (or 1% of GDP), has been indicated, with suggestions that the measures will have a greater focus on spending reductions rather than revenue gathering, although we will have further clarity on spending reductions in the autumn Spending Review. Domestically, the plans for Ireland’s own Budget 2011 are underway, with departments in the process of submitting proposals to the Finance Minister. Consolidation totalling €3bn (or 2% of GDP) is planned for Budget 2011 with €1bn of these savings set to come from lower capital spending. Recent indications also suggest that the bulk of the remaining €2bn will come from the current spending budget, where significant inroads have already been made. In May, voted current spending was down 9% yoy. Although Irish bond yields have suffered in the bout of concerns over Eurozone sovereigns, the Irish government has, on the whole, received strong plaudits for the measures taken to date in addressing its public finances. The UK now faces the same test, with the Budget due to get underway at 12.30pm today."

German exporters are doing very well, but the country is not immune to the European debt crisis, Chris Williamson from Markit told CNBC Tuesday. German consumers need to join in the recovery, he added:

BP: Oil giant BP reported overnight that two systems continue to collect oil and gas flowing from the damaged oil well in the Gulf of Mexico and transport them to vessels on the surface. The first is the lower marine riser package (LMRP) containment cap located on top of the Deepwater Horizon’s failed blow-out preventer (BOP). This system, which was installed on June 3, takes oil and gas to the Discoverer Enterprise. A second system, which started on June 16, is connected directly to the BOP and carries oil and gas through a manifold and hoses to the Q4000 vessel on the surface. The Q4000 uses a specialised clean-burning system to flare both oil and gas captured by this second system.

On June 19th, a total of approximately 11,050 barrels of oil was collected and 25.6 million cubic feet of natural gas was flared on the Discoverer Enterprise. This is less than recent averages because process facilities were shutdown for part of the day. In the same 24-hour period, 9,990 barrels of oil and 17.8 million cubic feet of natural gas were flared on the Q4000. The total volume of oil recovered from both the LMRP containment cap system and the Q4000 since they became operational is approximately 249,500 barrels.

The New York Times reports that anger swelled over the weekend when BP’s chief executive, Tony Hayward, took a day off to watch his yacht compete in what the newspaper termed an exclusive race off the southern coast of England on Saturday. Rahm Emanuel, the White House Chief of Staff, called it yet another public relations gaffe by Hayward.

Apparently in response to widespread criticism, BP said on Monday that Hayward had canceled his planned appearance at the World National Oil Companies Congress, a three-day conference in London this week. “Mr. Hayward’s very heavy schedule of commitments to Gulf of Mexico activities have led him to ask Steve Westwell, the BP Group Chief of Staff, to make the speech in his stead,” Sheila Williams, a BP spokeswoman in London, said in an e-mail message.

The MSCI Asia Pacific Index dipped 0.9% Tuesday after rising 2.8% Monday on news of China's scrapping of the renminbi peg to the US dollar.

The Nikkei dropped  1.22%; China's Shanghai Composite advanced 0.10%; Australia's S&P/ASX 200 Index dropped 1.18% and India's Sensex Index declined 0.81%.

China is avoiding a major trade war escalating with its pledge to allow the yuan to appreciate, Emil Wolter from RBS told CNBC Tuesday. The yuan moves will be gradual, but could hurt Chinese exports, he added:

Asia benchmarks

In Europe, the Dow Jones Stoxx 600 has dipped 0.60% Tuesday.

The ISEQ has dipped 1.31% in Dublin.

CRH has slid 2.29%; Elan is up 3.18%; AIB is off 6.31% and BoI has slipped 4.82%.

European Benchmarks

Irish Share Prices

Irish Stock Market Capitalisation by Company

Key Index Performance Statistics

Euribor Rates

AIB Daily Report

Bank of Ireland Daily Report

The euro is trading at $1.2290 and at £0.8356.

For live currency updates, check the right-hand column of the Finfacts home page.

The US dollar fell to $1.6038 per euro on Tuesday, July 15, 2008 - an-all time record.

Commodities

The Baltic Dry Index, a measure of shipping costs for dry commodities, hit an all-time High of 11,771 on the 21st of May, 2008.From that time it reversed and on the 5th of December, 2008 it hit a low of 663 - - close to a 1986 low.

The BDI closed at 3,005 on Thursday, Dec 31st - - a rise of 289% in 2009. The index averaged 59% lower in 2009 than a year earlier.

The index fell 3.4% in London on Monday to 2,601, taking its 17-day loss to 38%.

Crude oil for July 2010 delivery is currently trading on the Chicago York Mercantile Exchange (CME/Nymex) at $77.05 per barrel down 77 cents from Monday's close. In London, Brent for July delivery is trading on the International Commodities Exchange at $78.03.

Gold spot price

Gold is trading at $1.235.10 up $2.50 from Monday's spot price close in New York.

Irish Financials; Regulator speaks on funding: Goodbody's Eamonn Hughes comments  -- "There has been much commentary in recent weeks around the levels of maturing debt for the financial system in the coming months (€29bn alone in September according to the Minister for Finance), particularly with the government guarantee scheme set to expire at the end of the September. With recent commentary from the Minister indicating that discussions with Brussels were far advanced around a possible extension to year end, we note comments yesterday from the Assistant Director General of the Central Bank’s financial supervision (picked up in the Irish Independent) that “we’re satisfied that their risks are being managed”. He commented that the regulator had asked the banks to address concerns around the maturing debts and that he was confident the banks will pass through the upcoming re-financings “without incident”, though noting they must still overhaul their funding profiles. The regulator added that they have been ensuring that the banks make sure they have adequate collateral in place to tap the ECB should bond markets remain closed in the coming months. We note that eligible collateral at BOI is around the €40bn level and note that AIB had €48bn at the end of 2009 both of these figures will be further enhanced by NAMA throughout this year.

On capital, we note comments that the regulator expects to have completed its reviews of the capital requirements of IL&P, Anglo Irish and Irish Nationwide by September and has begun conversations with foreign owned institutions about their capital reserves. The regulator indicated that IL&P’s Prudential Capital Assessment Review (PCAR) should be completed next month, but could drift should IL&P become involved in a deal (with the EBS). We estimate that IL&P requires to raise €810m of capital (a higher figure gross of liability management/other), which we believe will require third party involvement in the institution.

Before we finish on the macro, the UK Budget today is likely to see a bank levy imposed on the UK banks. As international authorities push for a similar levy, it will be interesting to see how long it is before a similar mechanism appears in Ireland."

Irish Financials; Banking Supervision – the new approach: Eamonn Hughes adds - - "The Central Bank yesterday published a policy paper on its new approach to banking supervision in Ireland, with the paper describing the changes underway in the Regulator’s office. It picks up from the recent reports into the reasons for the financials crisis in Ireland and the regulatory failures that accompanied it. As such, it reiterated the more intrusive approach to regulation going forward, particularly for those banks receiving retail deposits. The paper identifies four main supervisory themes, with the CB set to publish the results of its work subsequently. The approach by the Irish regulator to adapt the banks for a safer banking system mirrors similar developments internationally. The transparent approach by the regulator is welcome and will hopefully guide the banking system to a more stable and sustainable model and footing.

Firstly, it will undertake an in-depth review of governance and risk management at the major retail banks later this year, with the findings set to be published in January 2011. This will look into competency of board membership, skills in risk management, the effectiveness of risk management arrangements and attitudinal and compliance developments among staff. Secondly, the CB is looking into lending standards. Within this, the CB has already commenced a review on new mortgage lending practices, focusing initially on first time buyers, with the findings due to be published in July. Thirdly, it will review the quality of bank’s strategies, where banks will need to evaluate the impact of the changing environment on their business models, broaden their lending capabilities and seek diversity in their earnings to attract lower capital charges and higher credit ratings. Findings from this review are due in January 2011. The final theme centres on remuneration practices, which in the past focused too heavily on asset acquisition and results from this work are due in November. All these programmes will feed into greater focus on looking at the viability of individual business lines, the quality of portfolios, maturity mismatches and quality of financial reporting."