Mr Osborne vowed that there will be no more tax rises and no more spending cuts in today' Budget, which will set out a package of measures he says will boost growth and jobs.

He has left no doubt that he will resist Labour calls to scale back the pace of deficit reduction, saying: "That's not going to happen."

Mr Osborne confirmed he will raise income tax thresholds in real terms in the March 23 Budget, amid reports that he may take all those earning under £8,000 out of the tax altogether.

And he gave a strong hint that he will postpone the 1p rise in fuel duty scheduled for April 1 in order to relieve pressure on motorists struggling with prices at the pump of £1.30 or more.

He is also expected to extend the Support for Mortgage Interest scheme introduced under Labour for a further year, helping an estimated 100,000 households avoid repossession. The scheme, which had been due to end at the start of 2012, offers support for home-owners struggling with mortgage repayment due to unemployment.

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Chancellor George Osborne will also use his Budget on today to trim the cost of holidays abroad by freezing air passenger duty.

The duty goes up automatically in line with inflation each November, but the Chancellor is expected to announce that there will be no rise this year.

At a cost to the Treasury of around £150 million a year, the measure could save a family of four around £4 on a trip to a European destination or as much as £36 on a long-haul flight to Australia.

At present, the duty adds £12 to the cost of an economy flight within Europe, £60 to the USA and £85 to Australia. Higher charges are applied to business and first-class tickets.

Follow Wednesday's Budget with our live blog by experts from the Association of Chartered Certified Accountants (ACCA), the global body for professional accountants. From 12noon.