UK chancellor George Osborne is presenting the 2013 Budget to parliament at 12:30 GMT (8:30 a.m. ET).

UK watchers widely agree that this budget could help restore or further erode the government's credibility.

Osborne is expected to stick to his plan for austerity (despite the backlash).

He has already asked most departments to cut their budgets by an additional 1 percent in 2013 and 2014, thereby freeing up £2.5 billion for capital spending. In December, he announced cuts of 1 percent in 2013-2014, and 2 percent in 2014-2015, to the budgets of various departments.

Here's a quick round-up of what analysts are looking for:

BNP Paribas - The Focus of the Budget will be monetary not fiscal policy

Paul Mortimer-Lee and David Tinsley, don't expect the Office for Budget Responsibility (OBR) to make huge changes to their forecasts since the Autumn Statement (AS) was issued recently (on December 5).

The current forecast is for 2013 growth of 1.2 percent, this could be lowered to 1 percent. They expect growth of 0.7 percent. It is unlikely that they will make adjustments to forecasts for the following years. The biggest revision will probably be to inflation.

Osborne does however have room to ease, because the end of the forecast period for the AS is 2017/18, and because, for that year, the AS forecast sees "cyclically adjusted current surplus at 0.9% of GDP."

"Because achieving a cyclically adjusted surplus by, say, 0.1% or 0.2% of GDP would be perfectly consistent with meeting the fiscal mandate, the Chancellor could, potentially, announce a discretionary easing of the fiscal stance worth 0.7% of GDP, or around GBP 10bn, and still meet his fiscal mandate.

Whether the Chancellor will decide to pursue such a policy is largely about politics. On the one hand, such a policy could look like an obvious deviation from ‘Plan A’. But on the other, with the political arithmetic stacking up against the parties in the coalition, this Budget may be time to make some selective easing of policy in the hope that some of the ‘feel-good’, or at least ‘feel-better’ factor starts to affect the electorate in time for the 2015 general election."

Other things to watch for:

• Delay in fuel duty hikes as a "gesture to ‘hard-pressed’ households."

• With the focus on monetary policy the budget is likely to review the Bank of England's remit, to give it room to loosen policy despite higher inflation. He can do this by widening the band for inflation.

• "The change that would probably give the MPC the most discretion would be to augment the inflation objective with a growth objective, in other words, to give the Bank of England a ‘dual mandate’ akin to the Federal Reserve’s."

• Gilt sales are expected to be £164 billion in 2013-14 because of disappointing tax revenue.