{"id":3954,"date":"2023-03-15T18:08:27","date_gmt":"2023-03-15T18:08:27","guid":{"rendered":"http:\/\/www.wealthatwork.co.uk\/jpm\/?p=3954"},"modified":"2023-03-28T13:12:52","modified_gmt":"2023-03-28T13:12:52","slug":"budget-2023","status":"publish","type":"post","link":"https:\/\/www2.wealthatwork.co.uk\/jpm\/2023\/03\/15\/budget-2023\/","title":{"rendered":"Budget 2023."},"content":{"rendered":"
[vc_row][vc_column][vc_empty_space][vc_raw_html]JTNDaWZyYW1lJTIwc3JjJTNEJTIyaHR0cHMlM0ElMkYlMkZwbGF5ZXIudmltZW8uY29tJTJGdmlkZW8lMkY4MDg0MTgyNTclM0ZoJTNEYzBlOTcxZTYwMyUyMiUyMHdpZHRoJTNEJTIyODQwJTIyJTIwaGVpZ2h0JTNEJTIyNDcyLjUlMjIlMjBmcmFtZWJvcmRlciUzRCUyMjAlMjIlMjBhbGxvdyUzRCUyMmF1dG9wbGF5JTNCJTIwZnVsbHNjcmVlbiUzQiUyMHBpY3R1cmUtaW4tcGljdHVyZSUyMiUyMGFsbG93ZnVsbHNjcmVlbiUzRSUzQyUyRmlmcmFtZSUzRQ==[\/vc_raw_html][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]Today\u2019s (Wednesday 15 March 2023) Spring Budget was largely relegated to a side-show by equity markets thanks to the collapse of Silicon Valley Bank in the US (please see here<\/a>) \u2013 in fact, even yesterday\u2019s US CPI inflation reading wasn\u2019t the be-all and end-all data reading it normally is as financial markets remain on the edge<\/p>\n

Right off the bat the central message from Jeremy Hunt, the Chancellor of the Exchequer, was clear:\u00a0 there was no money for tax cuts.<\/p>\n

However, given that the Office for Budget Responsibility (OBR) was far too pessimistic last November in its economic forecasts, as not only has the UK economy defied their expectations and avoided entering a recession in Q4 2022, but also GDP for 2023 is now expected to contract by just 0.2%, versus 1.4% previously, Jeremy Hunt does have some wiggle room \u2013 allowing him to tinker around the edges with a sprinkling of support for households and business to help offset the cost of living crisis.<\/p>\n

For example, the Energy Price Guarantee which prevents a \u2018typical\u2019 electricity and gas bill exceeding \u00a32,500 was extended for an additional three months versus the previously announced increase to \u00a33,000.\u00a0 Likewise, and copying the playbook of previous Chancellors, he waived the planned rise in fuel duty.\u00a0 Both these measures could help boost our discretionary spending – potentially benefiting retail, travel and leisure business.<\/p>\n

For businesses, Jeremy Hunt announced a new full-expensing regime to replace the capital allowances super-deduction which expires on 1 April 2023 with the aim of incentivising investment.\u00a0 However, it was also confirmed that the planned increase in corporation tax from 19% to 25% was going ahead \u2013 which could discourage investment.\u00a0 For example, the pharmaceutical company, AstraZeneca, recently announced that its planned new factory will now be built in Ireland (where corporation tax is just 15%) instead of Cheshire.<\/p>\n

However, the biggest benefit to the UK economy from today\u2019s statement will probably come from the help with childcare costs and the abolishment of the lifetime allowance (LTA).\u00a0 This should help reverse the recent erosion of progress in getting more women into the workforce and help persuade older (aka \u2018more experienced\u2019) workers from retiring early, and will hopefully help boost our economic output by reducing the current labour shortage that has forced many companies to reduce output.<\/p>\n

Interesting many of today\u2019s announcements will help ensure the inflation rate will, as we have previously argued, fall sharply this year suggesting UK interest rates are near their peak.<\/p>\n

In summary, while Jeremy Hunt was more entertaining to watch than he has been previously (even having a joke at Rishi Sunak\u2019s expense over the heating of swimming pools), the fact that the Spring Statement was light on meaningful actions meant that, on the whole for the UK equity market, it was unfortunately nothing more than a passing irrelevance.\u00a0 In fact, Jeremey Hunt referred to his \u2018E\u2019s\u2019 (enterprise, education, employment and everywhere) so often, that we thought he was going to singing the 1992 song \u2018Ebeneezer Goode\u2019 (eezer good) by The Shamen!<\/p>\n

Although the UK equity market is looking pretty grim today, as the FTSE-100 is currently down just over 200 points (or 2.75%), this has nothing to do with today\u2019s Spring Statement, but has been driven by broader issues including geopolitical concerns following yesterday\u2019s Russian-US collision; concerns over banks such as the Swiss bank, Credit Suisse; and the prospects for global interest rates.<\/p>\n

Investment Management Team<\/strong>[\/vc_column_text][\/vc_column][\/vc_row]\n <\/div> ","protected":false},"excerpt":{"rendered":"

Today\u2019s (Wednesday 15 March 2023) Spring Budget was largely relegated to a side-show by equity markets thanks to the collapse of Silicon Valley Bank in the US <\/p>\n","protected":false},"author":1,"featured_media":4058,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"_links":{"self":[{"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts\/3954"}],"collection":[{"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/comments?post=3954"}],"version-history":[{"count":3,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts\/3954\/revisions"}],"predecessor-version":[{"id":4057,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts\/3954\/revisions\/4057"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/media\/4058"}],"wp:attachment":[{"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/media?parent=3954"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/categories?post=3954"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/tags?post=3954"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}