Spring Budget 2023 Comment
Although the vast majority of the policies were leaked in the preceding days beforehand, I am sure there was a collective sigh of relief from many parts of the public when the Chancellor formally presented his Budget on 15 March. I welcome the new measures aimed at stimulating investment, tackling labour shortages across the economy, and trying to alleviate some of the pressures from the continued soaring cost of living.
The Autumn Statement was all about restoring stability and having confidence in the UK to be fiscally responsible. With the fires put out, the Spring Budget gives us a greater insight into the Prime Minister and Chancellor’s vision for how they aim to stimulate economic growth in the UK. While those hoping for significant tax cuts and giveaways will be disappointed, I expect the Chancellor will wait until next year before firing up some pre-election policies aimed at winning back the fractured public opinion.
Inflation continues to trend lower and is predicted to fall through this year. The Bank of England is, however, still tightening monetary policy, and it is important that the policy announcements are not inflationary in the short run. The Bank meets next week to set interest rates, and they will be thankful that Mr. Hunt appears to have kept some of his powder dry for another day.
There was very little reaction to the Budget within investment markets, with the focus firmly set on the fallout from the failure of Silicon Valley Bank (US) and closer to home, escalating concerns around Credit Suisse after its largest shareholder confirmed it would not provide new capital to the bank if required.
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John Naylor, Chartered FCSI – Head of Investment Committee
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