Darling under debut Budget pressure

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A dark cloud of economic gloom is hanging over Alistair Darling as he puts the final touches to his debut Budget.

Cabinet colleagues and backbenchers are clamouring for the Chancellor to find billions of pounds extra to help meet key pledges on child poverty.

Meanwhile, the Tories are urging cuts in levies on business and insisting that expected tax increases on strong alcohol and gas-guzzling cars should be handed straight back to consumers.

But Mr Darling's already-limited room for manoeuvre appeared to be shrinking even further amid claims he will be forced to lower growth forecasts.

Economic slowdown

Despite having downgraded his GDP predictions for this year to 2%-2.5% in October, economists believe he must now reduce them to 1.75%-2.25% on Wednesday.

Such a slowdown, sparked by flagging consumer spending and continuing fallout from the credit crunch, would place further strain on the public finances and necessitate some £6bn extra borrowing - equivalent to around £240 for every household.

The worse-than-anticipated performance will make it even more difficult for Mr Darling to forgo a 2% rise in fuel duty due to take effect next month.

Motorists

Motorists have been clamouring for the hike to be abandoned amid soaring international oil prices which have been inflicting pain at the pumps.

But Mr Darling is widely expected to hit some drivers even harder by introducing an environmentally-friendly 'showroom tax' which could put an extra £2,000 on the most expensive 4x4s and cars. Tax discs could also be colour coded to reflect carbon emissions, opening the door to more congestion charging around the country.

Big duty rises are almost certain for strong beers, wines and spirits when the financial package is unveiled, after the parties engaged in a 'bidding war' over tackling binge-drinking.