The graph shows the likely path for the PSBR in the next three years, and compares it with some important benchmarks for fiscal policy. Perhaps a bit more of this type of shuffling can be done again this year, but not much.And the option of simply increasing the path for the PSBR on top of the slippage which has already occurred is not really on either. After all, the Chancellor has recently gone out of his way to emphasise that the objective of budget balance is a genuine one, and cannot be shifted around to suit the political convenience of the Conservatives. At Westminster, there is an infinite well of on both sides of the Chamber, with almost all MPs believing that, whatever Ken Clarke says today, he will find a way to make large tax cuts in November. It would also delay the achievement of budget balance, which is Mr Clarke's long-term target. Furthermore, while this is likely to be the Treasury's forecast, the eventual out-turn is expected by most City economists to be much higher still.

For example, Goldman Sachs expects the PSBR to be stuck at around pounds 28bn both this year and next (assuming a pounds 3bn tax cut in the Budget).Against this background, it is hard to see how Mr Clarke can justify making anything more than the same kind of minimal tax reductions which so disappointed the public last year. In both of the last two years, modest scope for tax cuts has been found at the last minute by shaving public spending plans to reflect lower inflation, and by off-loading public investment plans to the Private Finance Initiative. That is when the Treasury will publish its Summer Forecast, which will have to come clean about the latest official projections for the budget deficit in the next two years. According to David Walton of Goldman Sachs, a combination of lower underlying tax receipts, slower economic growth and slightly higher public spending means that the path for the PSBR shown in the November 1995 Budget will have to be increased by about pounds 5bn a year.This would leave the likely projection in the Summer Forecast at pounds 27bn this year, and pounds 20bn next year.

The PSBR or budget deficit has been misbehaving for some time, which is unusual in a period of continuous economic growth. Last year, the eventual out-turn for the PSBR was pounds 32bn, about pounds 10bn more than the Treasury had expected a year earlier.Around two-thirds of this pounds 10bn was due to the mysterious disappearance of VAT receipts, which is still not well understood in Whitehall, but which must now be reflected in the projections for future years.The worsening PSBR problems are likely to come into sharp political focus on 9 July. Hanging on to the bitter end may not be an attractive option, but it is the one which his party will expect Mr Major to pursue.So a Budget probably needs to be planned for November This is looking trickier by the month. But can any party leader voluntarily go to the country when the most likely out-turn is annihilation, when the consumer is enjoying a strong recovery, and when the natural trend in government support towards the end of a Parliament has always been strongly upwards? Some estimates suggest that the underlying support for the Tories should now be rising by as much as a full percentage point per month as a result of improving consumer confidence, and the normal uptrend in government support as the election approaches.Others take a more fatalistic view, arguing that the Conservatives are destined to get the same share of the vote whenever the election is held - say around 36-39 per cent, the hard core for Tory support in the post- war period.But, even so, an October election would leave plenty of Tories claiming that another six months would have tipped the balance, or would at least have severely curtailed the Labour majority And, what is more, they could be right. Bagehot's arguments are that the Government already risks being pushed by the Ulster Unionists, or even by its own unreliable supporters, into an election at a particularly bad moment; that the recent smack of weak government is not helping the Tories' political standing, anyway; that the economy may look at its best this autumn, but then lose its gloss during the winter; and that John Major may feel an obligation in the national interest to end the present drift. Granted, his party will make mincemeat of Mr Major if he loses the election, whenever it is held. With the possibility of a disappointing Budget looming in November, it may even be crossing the Prime Minister's mind that an autumn election might not be such a bad idea, as the the outstanding Bagehot (alias David Lipsey) pointed out in his column in the Economist last week.

Although the desperation for tax cuts within the Tory Party seems to have diminished a notch or two during the past few months (reflecting the recovery in the consumer sector, and especially in housing), I doubt whether the idea has really dawned on the backbenches that the long-awaited tax cuts could be tiny or even non-existent. Also likely to apply is Zone FM, a gay channel.Under changes to the Broadcasting Bill, now being debated, radio companies will be allowed for the first time to hold two FM licences in a single region, following intense lobbying from companies such as Capital. The new freedom could encourage other holders of FM licences in London to apply.The Authority, which is expected to take three months to reach a decision, uses three broad criteria for the award: financial viability, broadening choice, and enhancing fair and effective competition.. An early favourite in radio circles is XFM, which is aiming at a youth audience. Capital, the dominant commercial radio company in London, would return its AM frequency to the Radio Authority if it wins the FM licence."Capital Gold is just not very satisfying on AM," Richard Park, group director of programming at Capital Radio, said late last week.

"AM is just not the appropriate place for a Gold format." He said that the station's playlist of hits from the 1960s, 1970s and 1980s needed the higher standard of FM to win bigger audiences and compete effectively with BBC radio.Other likely bidders for the London licence include Black FM, Choice, and Festival, a listings and entertainment channel backed by Time Out, the London listings magazine. The group joins a range of media companies angling for the licence, possibly the last FM frequency in London to be awarded along the conventional radio spectrum. Industry executives expect at least 20 applications to be lodged by the time the deadline expires on 9 July. Among other hopefuls is Capital Gold, currently broadcasting on AM, whose backers hope to move the service to FM in a bid to improve transmission quality. CLT, the Luxembourg-based broadcaster, is expected this week to confirm it is bidding for the hotly contested London FM licence, offering a "pop" music format similar to its successful Atlantic 252 station. Chemical designs and supplies software for pharmaceutical and biotechnology firms, for use in techniques that aid the production of large numbers of new compounds.For every new drug on the market, 10,000 different compounds must be made and tested for biological activity. Clients include Hoechst Marion Rousell, Glaxo Wellcome, Rhone-Poulenc Rorer, Pfizer, and Peptide Therapeutics.The third flotation is Cirqual, which makes aluminium and plastic extrusions and hopes to raise pounds 2m-pounds 5.8m by a placing through brokers Neilson Cobbold and advisers Price Waterhouse Corporate Finance.The flotation is expected to value Cirqual, a group put together from existing businesses only last year by the investment group Gartland Whalley and Baker, at pounds 16m-pounds 20m.The chairman is Tony Gartland, who oversaw the rapid growth of FKI, where he was chief executive in the 1980s.The placing is to reduce borrowings and allow the company to make new acquisitions.AIM celebrated its first anniversary last Wednesday..