London Briefing: This year's UK budget, due on March 16th, is attracting even more attention than usual.

The proximity of the general election is to blame, of course, with the added twist given by Gordon Brown's almost invisible presence on the campaign trail.

The decision by Prime Minister Tony Blair to give the management of the election to Alan Milburn, rather than the previous incumbent, the Chancellor, has prompted Brown to maintain an almost complete silence.

Some commentators think he is sulking, while others believe he is saving his firepower for the budget speech.

Labour's campaign has floundered in its early stages. Some opinion polls have the Conservatives breathing down the government's neck. Nevertheless, nobody thinks that Labour will actually lose; the debate is now over the size of the reduced majority. The Tories have made ground on immigration and policy proposals (on council tax) designed to capture the important "grey vote".

Blair has studiously thwarted Conservative comebacks by adopting any policies they come up with that turn out to be popular. Tory proposals on immigration are off-limits in this regard (too right-wing even for Blair) so attention is swinging round to what Brown can do to offer carrots to the elderly who are attracted to Tory promises of reduced council tax bills.

More generally, Labour campaign managers are hoping that the nascent Tory revival can be strangled at birth by two things. First, a general reminder that the economy has done well under Brown's stewardship won't go amiss. Second, some token tax cuts would go a long way to calming fears that rapid public spending growth means that taxes will actually have to rise after the next election.

A number of commentators have made the case for the inevitability of tax rises. A bit of the heat has recently been taken out of this debate by the convenient decision by the people in charge of counting spending to reclassify certain aspects of expenditure so that Brown's targets look slightly more achievable.

Nevertheless, there is precious little scope for the chancellor to cut any taxes in anything other than a token way, unless he wants to risk his reputation for prudence.

The Tories, in their own copycat fashion, have promised minimal tax cuts if elected, choosing to criticise the government for the parlous state of public finances.

Their promises of tax reductions are of a suspiciously similar size to the ones likely to be announced by Brown, according to people "close to the Treasury".

The sight of the government and opposition running around in circles trying to copy each other's best ideas is an increasingly bizarre one.

The budget is not likely to contain any new spending promises: the budgetary arithmetic simply cannot be stretched that far. So the chancellor has a tough task ahead of him: he has to maintain his reputation for fiscal competence, persuade people that the economy remains safe in Labour's hands, while offering enough sweeteners to convince the electorate that they will not be better off, however marginally, in Tory hands.

In fact, Brown finds himself in the intriguing position whereby Labour's flagging electoral appeal means that the government is now looking to him to ensure victory, notwithstanding his marginalisation in terms of the formal campaign itself. He must be relishing the irony.

Expect lots of references to the longest economic expansion in British history; somebody somewhere will be making a book on the number of times Brown uses the word prudence.

If the chancellor's position is ironic, the Bank of England is also facing an unusual test. It meets this week to set interest rates in an unusually charged political atmosphere: while nobody believes that the monetary policy committee will be swayed by the proximity of the general election, those friends of Brown have let it be known that any interest rise should happen sooner rather than later.

The logic appears to be that, if the electorate is to be upset by higher mortgage bills, better it happens now rather than in the days just before the election. That's how close the campaign has suddenly become.

Chris Johns is an investment strategist with Collins Stewart. All opinions are personal.