BRITAIN. A penny saved is a penny earned

To walk down Threadneedle or Lombard Streets today in London's financial district is to catch the excitement of a city where fortunes are being made overnight as shares reach record levels. Pin-striped businessmen in crisply laundered shirts and flourishing furled umbrellas appear ready to take on the world.

A budget which reduces British income taxes for the first time in seven years has reinforced business confidence. One broker says it will ``stimulate growth, hold down inflation and increase incentives.''

But if the City feels the budget provides a little butter this year and the promise of jam next year with hints of pre-election tax giveaways, that is not the view two tube stations away or just 10 minutes walk from Threadneedle Street.

To walk down Petticoat Lane in London's rundown East End is to glimpse another side of Britain where people's fortunes are not changing, and where the residents are already dismissing the notion that the budget can lift them out of the poverty trap.

The market holders on the lane which comes alive on Sunday as racks of clothing, shoes, belts and handbags are wheeled say it's a budget for the rich, and that the unemployed may even be worse off.

That's how Cockney window-washer Jim Harrison sees it. Dressed in workingman's overalls with a tall ladder crooked over his arm he says the budget does ``absolutely nothing for me. I'm a working class man. What does this government do anyway for the working class? They put 11p on cigarettes which is what the working class smokes and nothing at all on cigars and pipe tobacco which rich people smoke.''

A woman with faded green headscarf, a hole in her shoes, and a tattered suitcase waiting at the Houndsditch bus stop just around the corner doesn't even want to think about the budget.

The fact that income tax was being reduced was irrelevant to her. She was a pensioner. And no rise in car excise taxes was also immaterial. She had no car to drive. ``I'm at the stage I just want to survive.''

Despite these criticisms, Mr. Lawson's budget was widely seen as a populist budget which caused relatively little offense in terms of what it imposed on the general public.

In a break with the past, and to the relief and surprise of many, the chancellor did not levy any duties on beer and other alcoholic drinks, or increase the car excise tax. Petrol went up by less, 7.5 p. a gallon, than was generally anticpated. But cigarettes went up by a steep 11p on a packet of 20. Mr. Lawson covered himself by saying that the sharp rise in cigarettes was done for health reasons.

The chancellor set the tone for his speech by acknowledging the severe and sudden impact in the fall of oil prices which drastically reduced his scope for tax cuts. The fall in oil revenues amounted to as much as 5 billion this year, and automatically sabotaged his hope voiced last year that some 3.5 billion would be available for tax cuts this year. Instead the amount he was able to give away was just under 1 billion.

The fall in oil prices, coming hard on the heels of the West-land debacle and an unexpected jump in the unemployment rolls had been a setback to the government of Prime Minister Margaret Thatcher.

According to Sir Eldon Grif-fiths, a Conservative member of Parliament and one of the Prime Minister's inner circle of advisers, these trends had been a severe disappointment to the Prime Miniser and her Cabinet. They had felt, he said, that by now they should be able to sit back a little and start to gather in the rewards.

With Mr. Lawson apparently boxed in by the fall in oil revenues, his taking one penny off off the pound on the standard tax rate won the admiration of most commenators.

In doing so, Mr. Lawson restored the credibility in the government's long standing pledge to cut taxes. The chancellor gives every indication that he hopes to reduce taxation still further to 25 percent before the next election.

The opposition faulted Mr. Lawson on not attempting a more interventionist budget that would put thousands of people to work, and reduce the 3.27 million unemployment line. There was also criticism that the budget failed to live up to the government intentions to help the lower paid.