IRISH business will be watching the British budget for two reasons. One will be to see what impact it has on the value of sterling. The other point of interest will be what effect Mr Clarke's tax changes will have on the competitiveness of British business. Sterling's strong run in recent weeks has been based partly on the view that Mr Clarke is taking a prudent approach to economic management. Too much largesse from the Chancellor tomorrow could upset investor confidence and lead to a reversal for the currency. On balance, most analysts believe that he can deliver sizeable tax reductions - and promises of more to come - and still keep the markets happy. If this is the ease, then sterling may remain strong over the rest of the year, giving a boost to exporters to Britain, but causing headaches for those selling in the US Continental EU markets who are being hit as sterling's rise pulls the pound up against the deutschmark bloc and the dollar. But the bad news for Irish business is that Mr Clarke will continue the Conservative tax cutting agenda. This can only increase the gap between the tax burden facing Irish business and competitors in the UK and put pressure on the Government here to further reduce employers' PRSI and income tax in our Budget. Finally, further increases in excise duty on petrol may tempt more Northern motorists to travel to the Republic to fill up their tanks.