Mr McCreevy has repeatedly insisted that inflation will be a cornerstone of the Budget. That is likely to mean cuts in direct taxes, which would force the consumer price index down, rather than fiscal prudence. As a result we are likely to see reductions in VAT and possibly excise duties. Both are likely to have to broadly converge with European averages in any case following the Nice summit and this could be convenient for the Minister. The other problem with cutting VAT and excise duties is that it also puts more money into consumers' pockets and thus over the longer run could boost inflation.
Some commentators also question whether price cuts are likely to be passed on.
Reductions in stamp duty are on the cards particularly for share transactions. Other anti-inflation measures which are being examined include a savings bond. This idea was floated by the Taoiseach earlier this year but appears to have fallen off the agenda since then. Ministers are anxious that no surprise element emerges in the Budget to detract from what they hope will be a popular and vote-winning exercise. One possibly contentious area is childcare which will feature prominently in the Budget.