A look at the day ahead in European and global markets from Vidya Ranganathan

Britain's government gets another report card on its efforts to curtail spending while Germany, in contrast, goes for a final vote on its big borrow-to-spend splash on Friday.

The UK government finances report should show how deeply in the red the government is as the financial year draws to a close and just days ahead of finance minister Rachel Reeves's budget update on March 26.

Government departments have been tightening their purse strings to help Reeves meet her budget reduction goals, which have been trammelled by rising gilt yields and a slowing economy.

Last week, British Prime Minister Keir Starmer pledged to "hack back the thicket of red tape" suffocating the economy and the British government abolished NHS England, bringing the health service back under direct ministerial control.

Reeves has set herself an ambitious target of balancing day-to-day spending and tax revenues by the 2029-30 financial year. She is expected to announce she has rebuilt a 9.9 billion pound ($12.83 billion) fiscal buffer, Bloomberg reported on Wednesday citing an unnamed source.

In Germany, on the other hand, investors have been celebrating the almost certain passage on Friday of legislation to create a 500 billion euro ($542 billion) fund for infrastructure and higher spending on defence.

The plan was approved this week in the lower house Bundestag, giving conservative leader and chancellor-in-waiting Friedrich Merz a huge boost and investors reason to hope for a recovery in Europe's largest economy.

The legislation goes today to the Bundesrat upper house but appears certain to pass there.

Meanwhile in broader markets, Wall Street's bullish momentum earlier this week, inspired by Federal Reserve Chair Jerome Powell's view that the economy is in good shape and tariff-related price rises will be transitory, seems to have fizzled out.

Treasuries and the dollar are up, indicating a broader "risk-off" tone at play, as is gold, which has already rocketed 16% this year to record highs.

Policymakers across the globe have struck a cautious note in a week filled with central bank meetings as uncertainty in global economics and politics grew. The U.S. Federal Reserve, the Bank Of Japan and the Bank of England all held rates steady.

Key developments that could influence markets on Friday:

DATA: UK public finances (February), Euro zone current account (January), Euro zone consumer confidence (March, flash estimate), Canada retail sales (February)

SPEAKERS: Chicago Fed President Austan Goolsbee, New York Fed President John Williams, European Central Bank's Jose Luis Escriva at an event in Barcelona.

($1 = 0.9221 euros)

($1 = 0.7719 pounds)