There was disappointment at the Chancellor's attempts to dampen consumer spending and the housing market. Roger Bootle, economist at HSBC, said: "I'm very disappointed. The reduction in Miras is pathetic, absolutely pathetic. What is the argument for not getting rid of it altogether? I find it quite incredible.
"I think this is the merging of two Budgets - Gordon Brown's instincts, which were right, and Tony Blair's timidity as far as the measures go. As for damping down consumer demand, this Budget is a mouse."
The Confederation of British Industry said interest rates would have to go up higher than otherwise. Mr Bootle's estimate a rise of at least half a per centage and, and perhaps a further similar increase depending on the pound."
Paul Turnbull, chief UK economist at Merrill Lynch, also thinks interest rates will have to rise, probably to 8 per cent by the first half of next year "and could go higher".
Sir Ronald Hampel, chairman of ICI, said the Budget's emphasis on stability, skills and investment was encouraging, but he was worried by the strength of sterling and the abolition of tax credits on dividend payouts: "The budget measures may not be enough to slow down growth in consumer spending... the welcome cut in corporation tax will increase investment, however there are doubts about the impact of the abolition of tax credits on companies' investment plans. "
Frank Eaton, chief executive of Barratt Group, the builders, said: "This is a clear signal the new Government is continuing the previous trend of attacking home ownership and placing unnecessary financial burdens on homebuyers. There is no need to cool a housing market that outside the South-East is only lukewarm."
Dennis Webb, chief executive of Beazer, one of the UK's largest housebuilder was more positive: "This Budget should sustain the housing recovery. We are pleased income tax bands were left where they are - it gives people a chance to plan their spending."
"And on stamp duty they left first time buyers alone - bigger spenders should be able to cope with the increase. We are delighted that the Government wants to get away from boom and bust. Stability is what we all want."
Richard Jeffrey, group economist at Charterhouse, said: "This Budget is not enough of a constraint on consumer spending - it throws the ball right back to the Bank of England. The immediate speculation is how much the Bank will have to raise interest rates. That has to be negative for share prices.
"However, construction companies will benefit from the housebuilding programme and refurbishment of schools."
Howard Maguire, head of UK equities at Threadneedle Investment Management, said: "I think that sterling will continue to strengthen. The drop in corporation tax is a nice counterbalance to the removal of dividend tax credits. Companies exposed to strong sterling and which have low dividend cover will have had no relief from this Budget."
Predictably, the film industry was delighted by the unexpected tax breaks on production costs, coming as it does after years of refusals by Tory and Labour governments to consider helping the industry.
Gary Smith, chairman of AIM-listed film group Winchester Multimedia, said: "At least the Government is behind the film industry.
"The measures will help keep films in Britain. But I would have liked to see more measures to offer tax relief for investing in our film industry."
The Engineering Employers' Federation welcomed a "pro-business Budget".
"We are encouraged by the support for investment by small and medium size businesses, especially the reduction in corporation tax and the increase in capital allowances. The engineering industrywill welcome the increased spending on housing health and education.