Govt: Economy 'could be worse'

The Chancellor George Osborne has told ITV's Daybreak that the country's economic problems "could be a lot worse", referring to the situation in Cyprus, as he defended his Budget plans to kickstart the recovery.

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Cigarette duty has risen over last two Budgets

It is likely the government will raise duty on cigarettes in this year's budget Credit: Press Assocation

Smokers are likely pay more to satisfy their habit when George Osborne announces this year's budget on Wednesday.

In 2012, duty on cigarettes increased by five percent above the rate of inflation, resulting in an average price rise of 37 pence.

In 2011, it rose by 2% above inflation adding 50p to the price of "economy" cigarettes and 33p to "premium" brands.

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