It's official: austerity starts tomorrow. Probably

There is hope - though not expectation - in the City and beyond that the government's stance on the pub sector will be an improvement on its predecessor's.

That said, George Osborne, Chancellor of the Exchequer, won't be pulling any punches when he delivers his emergency Budget tomorrow (Tuesday). He will doubtless say things are so bad that only tough, corrective action taken now will suffice, lest we are truly on the 'road to ruin'. He'll be looking for easy wins, however painful the consequences for consumers and businesses alike.

A VAT increase is highly likely, but some - perhaps now many - are preparing for an 'unthinkable' hike in beer duty too. For those operators already trading at the very edges of sustainability tax rises of either sort could prove fatal. Some in the City believe businesses which have traded largely on price could see much of their customer base migrate to supermarkets and their own living rooms.

Doubtless such operators will have a plan up their sleeve, but when top-notch outfits such as the prudent and conservatively-financed Fuller's express concerns about the macro economic environment, it makes you think.

Yet with a few exceptions the City seemed relatively unconcerned about beer duty last week. Pubco shares are unlikely to dip sharply in the event it goes up since much has been factored into their price already, not least the parlous state of the consumer's wallet, etc.

Chancellors don't - or shouldn't - put taxes up unless they are sure they will raise sufficient money to justify any increase. He might not care a fig about pubs, but Osborne will surely be aware of the plight of the sector and the law of diminishing returns.

Hence there may be something in the suggestion he will save any duty moves for alcoholic products other than beer, as per various pre-election pronouncements.

The 'traditional' pub and brewing sectors will be praying this is the case.