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Financial Focus

George Osbourne yesterday announced he was scrapping the 50p
rate as he unveiled a raft of tax cuts for individuals and businesses –
but he decided to stage a raid on pensioners, banks, buyers of £2m
properties and other groups to fund his headline grabbing measures.

In what he described as a Budget that “unashamedly backs business”, the
chancellor said he was cutting corporation tax by two percentage points
to 24%. The headline rate will then fall by 1% in each of the next two
years to stand at 22% by 2014.

THE EUROPEAN CENTRAL BANK is falling behind on a €40bn asset
purchase programme launched at the height of Eurozone crisis, in a
sign it could be dropped as a first step towards unwinding huge
emergency support for the region’s financial system. Purchases of
“covered bonds” – debt backed by pools of assets favoured by some
institutional investors – have so far totalled less than €9bn. The scheme
started last November and was originally intended to run until October
at the latest.

LLOYDS BANKING GROUP has raised £170m through a new share
issue as it looks to keep debt holders on its side. The money will be
used to restart dividend payments on certain bonds, a practice that was
suspended by the European Commission following the taxpayer bailout
of the bank during the 2008 financial crisis.

MARKETS:
THE FTSE 100 posted a fractional gain yesterday after a volatile session as strength in market heavyweight Vodafone
countered weaker commodity stocks hit by below par U.S. data, which revived concerns over demand for metals. The UK
blue chip index closed up 0.54 points, or 0.01%, at 5,891.95, surrendering a 0.3% gain in the closing auction. The index
fell 1.2% on Tuesday. Miners fell the most following weaker than expected U.S. housing data that raised concerns about
recovery in the world’s biggest economy.

IN OVERNIGHT TRADING, stocks were little changed after a volatile session as China slowdown worries dissipated, but
disappointing US housing data left bourses struggling to make headway. Wall Street’s S&P 500 greeted the opening bell
with a rise of 0.2%, helped by a well-received earnings report from Oracle, the Silicon Valley tech giant. Gains were lost,
however, after a report showing resales of homes unexpectedly fell in February.

CURRENCIES:
THE DOLLAR pared a decline against the euro after a private report signalled manufacturing may shrink in China and
before U.S. data forecast to show initial jobless claims dropped, boosting demand for U.S. assets.

ENERGY:
PRESIDENT BARACK OBAMA will visit one of the biggest U.S. solar projects today, a day after imposing duties on
Chinese imports that analysts said were too low to curb record installations. The Commerce Department yesterday set
duties of as much as 4.73% on solar products from China, backing a complaint from U.S. solar makers who said their
rivals were receiving improper government subsidies.

COMMODITIES:
IN THE WORLD’S biggest agricultural market, the director of grains research at the largest broker on the Chicago Board
of Trade says soybeans will beat corn. Dan Cekander at Newedge USA LLC says soybeans, off to the best start to a
year since 2005, will trade at the most expensive levels relative to corn since 2010. Global inventories are poised to
slump 17% to the lowest in three years, while world corn harvests increase to a record and U.S. farmers prepare to plant
the most acres since 1944.

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