This week’s Budget could be a defining one given the challenges the Chancellor faces not just in the UK, but from various ‘global economic headwinds’. George Osborne may have made some bullish predictions on the UK economy in the Autumn Statement, but in light of slowing global growth and low oil prices, he has relatively little room for manoeuvre when it comes to balancing the budget by 2019/20 – his self-imposed target.

One of the most pressing business issues confronting him is the slump in oil prices which has seen significant reductions in jobs and investment in the industry and its supply chain. In turn this has resulted in a serious decrease in the tax take from that sector. Those involved in UK oil and gas production have been vocal in their calls for Government intervention to help them through this difficult period. The Chancellor will be under pressure to bring in a meaningful suite of measures to assist, particularly for companies based in the North East of Scotland.

A policy that could be a victim of its own success in this Budget is the 10% capital gains tax rate available to business owners on sale, known as Entrepreneurs’ Relief. Is it costing too much? Mr Osborne may look at reducing the £10 million lifetime allowance per individual in order to claw back some cash – but he’ll want to avoid dampening the entrepreneurial spirit the policy was designed to foster.

Pensions have also been well-trailed in the media and it is likely that the Chancellor and his team at the Treasury will shelve any fundamental changes to the pension system, such as an ISA-based pension, prior to the forthcoming EU referendum. However, he may well look at restricting further contributions to the lifetime limit and the rate at which tax relief is granted to higher earners. That aside, the recently introduced Pensions Freedom – where people aged 55 and over have the option of taking the whole amount of their pension as a lump sum - is still being monitored, so it seems prudent that stability is the watchword for the foreseeable future where pensions are concerned.

Another well-documented story is the UK Government announcement that the 5% reduction in the highest income tax rate in 2012 led to an £8 billion increase in overall tax take. That has led to pressure to further reduce the 45p top tax rate, but there are clear political risks with that approach. We might expect the Chancellor to look instead at widening the basic rate band of income tax, as increasing the income level at which people pay a higher rate of tax is a potential give-away that would be a welcome political sweetener in the run up to the May elections.

One of the knock-on effects of the aforementioned oil downturn has been cheaper prices for drivers at the pumps. However, given that fuel duty has been frozen for four years now, Mr Osborne may feel this is a good time to nudge through higher fuel duties. With oil prices still low, an increase would not have the same impact on vehicle users who have been used to paying significantly more at the pumps, and would provide the Treasury with welcome additional revenues.

It remains to be seen how Mr Osborne will attempt to balance the books without derailing his plans for steady economic growth. Given the current economic and political climate, his options are limited, but he may have a bit of wiggle room as a result of continued low interest rates, which will leave more money in his budget and reduce the cost of servicing the national debt.

One thing is for sure: Mr Osborne is a master at producing surprises on Budget day. Businesses will be watching closely to see if the Chancellor can deliver any good news in a precarious-looking economic environment.

Mark Houston is managing partner, Johnston Carmichael, Glasgow