Budget 2009: Little help for economy expected
The chancellor is unlikely to unveil any major public spending plans to help the economy, analysts believe.
Despite an increasing strain on public services and pressure to create jobs, Alistair Darling may be forced to make cuts to balance the books.
"Our most recent assessment is that if the chancellor wants to balance the books by 2016, as he has said, he will either need to cut spending or raise taxes," said Gemma Tetlow, senior researcher for the Institute for Fiscal Studies (IFS).
Rather than raising taxes, reducing spending would seem to be the more palatable measure.
However, she added "it is unlikely he will acknowledge the hole we say is there."
Mr Darling will also find it difficult to announce a package to boost the economy for another reason, Ms Tetlow added.
"We have already seen Bank of England governor Mervyn King saying another fiscal stimulus plan is unaffordable in the current climate, so if he does mention anything we would expect to see a justification," she said.
Martin Weale at the National Institute of Economic and Social Research (NEISR) agreed the chancellor's hands are tied.
"There is not much the chancellor can do to aid the economy," he said.
"Given the intervention by the governor of the Bank of England, the government is not keen to help the economy.
"I am sympathetic to further fiscal stimulus, but the difficulty is when to turn it off.
"I think the chancellor will be talking about savings. The public finances are in a dreadful state."
He added: "He will be talking about limiting growth in public spending."
The chancellor is also likely to revise down his predictions for economic growth, the IFS predicted, as forecasts made in the pre-Budget report are now looking too optimistic.
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