London Briefing: Chris Johns Hostile commentators have made much of the overshoot in borrowing already conceded by UK Chancellor Gordon Brown. And they are likely to greet similar announcements in today's budget with talk of a "black hole in the public finances".

The problem for Mr Brown is that higher borrowing is certain, but nobody knows whether that represents a structural difficulty - which can only be cured by permanently higher taxes and/or lower spending - or is merely a cyclical affair. If higher public-sector deficits are merely due to the slowdown, then the problem goes away of its own accord when the economy recovers.

Mr Brown will undoubtedly claim that the ballooning deficit is nothing to do with him and that its cause, the sudden slowdown in the economy, is equally a blame-free zone, being driven by that nasty world economy.

Another difficulty for Mr Brown is that the economy has hit a wall precisely at the moment when income taxes are going up. This is called pro-cyclical fiscal policy, whereby booms and busts are made much worse than they need to be by wholly inappropriate fiscal changes.

This month's rise in taxes might qualify as another Brown/ Blair increase in stealth taxes.

But a 1 per cent rise in national insurance contributions is such an overt, and pathetic, attempt to stick to the letter - but not the spirit - of the electoral pledge not to raise taxes, even the government doesn't bother to claim that promises are still being honoured.

This rise in direct taxation was announced a long time ago, when the economy was in much better shape, so Mr Brown could claim that he has merely been unlucky.

But the fact remains that the economy might be slipping into recession just as people's pockets are being hit hard. This is even worse than it sounds when we realise just why the economy is cooling rapidly.

Last year, the UK economy was kept on life support by the consumer - business spending on plant and equipment and capital spending collapsed. A similar pattern was seen in the US. Now, it looks like the consumer is giving up the ghost, with no sign of the corporate sector being remotely interested in taking up any of the slack. If anything, businesses are in even worse shape.

Consumers on both sides of the Atlantic seem to have deserted the shops at the beginning of February. This may have been a direct reaction to events in the Gulf but may have happened anyway. Whatever the cause, consumer spending is slowing rapidly.

And Mr Brown is about to hit consumer incomes. You don't need to be a rocket scientist to work out what happens next.

In such circumstances, we might expect the chancellor to try to ameliorate some of these effects. Not a bit of it.

He is likely to tinker with some arcane bits of the tax system to raise taxes further - a favourite trick of his. By aligning upper income tax and national insurance limits, he could raise plenty of extra cash, but nobody will understand it this afternoon and nobody will see it coming until it hits their pay packets. A similar stunt was pulled on pension funds a few years ago.

Mr Brown raised several billion pounds in a move that few understood and nobody cared about but amounted to a huge rise in taxation that contributed to the pension crisis now facing the UK.

The key issue facing the government remains the failure to deliver on the pledge to improve the NHS and education systems.

Taxes are going up to fund the spending increases but there is no obvious increase in the level of service provision because it is all being blown on public-sector pay increases. Some of us did suggest that this would happen when the big spending push was originally announced. Britain's infrastructure is still decaying, its public services still hopeless.

About the only real surprise that could be delivered by Mr Brown today would be an announcement about the single currency. It's a long-odds call, but he could use the cover of the global slowdown to announce a delay to the economic assessment about the merits of entry.

In which case, it's off until after the next general election. In which case, sterling will probably rise. Which will be taken by Mr Brown as a financial market vote of confidence in his budget. Another big mistake.

Mr Brown has been grimly determined to avoid the fate of all previous Labour chancellors and to escape the label "tax and spend" - but fate has a funny habit of being inescapable.

Chris Johns is chief strategist with ABN AMRO Securities, London. All opinions expressed are entirely personal.