ALL eyes are on the forthcoming Budget as employment levels in Darlington continue to rise, despite the situation in Iraq.

Businesses in the town continued to recruit staff last month, according to the Darlington Business Index, which is compiled by Clive Owen and Co, chartered accountants.

Confidence levels fell in tandem with turnover - even though employment levels in Darlington rose for the third month consecutively.

But Tony Luckett, partner with Clive Owen, warned that concerns surrounding the future of Teesside's Corus plant could have a significant detrimental effect on the region's economy.

Nationally, with the uncertainty of war being resolved, business analysts expect the price of oil to fall because many believe the war with Iraq will be over quickly and cause very little damage to production.

Mr Luckett said: "As the Budget rapidly approaches, Darlington business owners will be reiterating the sentiments of the CBI's director-general, Digby Jones, who has urged Chancellor Gordon Brown not to raise business taxes yet again.

"Let us hope Mr Brown's compassion for business has an impact on next month's index figures."

On a more positive note, regional supermarket chain Morrison, announced a 13.8 per cent rise in pre-tax profits for the year to February 2, which Mr Luckett believes will have a positive effect on the economy.