Centre for Policy Studies’ Post

💼 Today’s Autumn Budget brings several noteworthy changes impacting UK businesses and regions. The minimum wage increase and changes to tax policies, such as the removal of non-domicile tax status and VAT adjustments, are likely to shape the landscape for companies and individuals alike. It’s encouraging to see commitments toward regional development, with funding for infrastructure and more fiscal autonomy for certain areas. Direct Capital Exchange has shared some helpful highlights from today’s announcements, covering how these changes may influence economic strategy for businesses in the UK. It’s always interesting to see how policy shifts impact cross-border business and the broader economic environment! #UKBudget #Chancellor

January’s public finances figures have delivered some good news for Chancellor Jeremy Hunt ahead of the Budget in two weeks' time, with economists predicting £15-20 billion of extra headroom for vote winning giveaways. UK public sector borrowing showed a record surplus of £16.7 billion for January, data from the Office for National Statistics revealed this morning. This surplus was more than double the surplus of January 2023 and the largest surplus since monthly records began in 1993 in nominal terms. Borrowing in the financial year-to-January 2024 was £96.6 billion, £3.1 billion less than in the same ten-month period a year ago. This was £9.2 billion less than the £105.8 billion forecast by the Office for Budget Responsibility (OBR) in November 2023, thanks in part to a fall in Interest payable on central government debt. More at #Proactive #ProactiveInvestors http://ow.ly/Cax4105jhv9

Big changes to taxes, spending and the fiscal rules. Our article focuses on the potential effects on the UK economy and financial markets. #gilts #budget #economy

📣 Chancellor’s Budget Highlights – What Businesses Need to Know! Today, Chancellor Rachel Reeves presented her first Autumn Budget, laying out key changes that will shape the UK’s economy, including tax adjustments and new investment priorities. Here’s a quick overview from the team at Direct Capital Exchange: - Higher Wages & New Business Costs: The minimum wage will rise by 6.7%, putting more money in people’s pockets but also raising payroll costs for businesses. - VAT Changes & Wealth Tax Adjustments: VAT will be applied to private school fees, and non-domicile tax status will be removed by April 2025, impacting tax planning for some businesses and high-net-worth individuals. - Regional Growth: Greater fiscal autonomy for areas like Manchester, plus infrastructure projects including the TransPennine Rail upgrade, which could create new opportunities in various sectors. 💼 For businesses with global ambitions, currency volatility and tax shifts make effective foreign exchange strategies more crucial than ever. At Direct Capital Exchange we’re here to help you navigate these economic changes and make the most of international opportunities. Let’s discuss how this budget could impact your financial plans and cross-border growth strategies! 📧 support@dcexchange.co.uk 📞 0203 925 4994 #Budget #Chancellor #Uk #Breakingnews #DirectCapitalExchange #ForeignExchange #Currency #UKBudget

Politics is all about choices. With her first Budget, Rachel Reeves has made clear what side she comes down on: tax the strivers, punish the wealthy and prop up the public sector with the proceeds. More pounds in the public sector’s pockets, while everyone else’s pocket gets pounded. Economics, however, is all about trade-offs. What happens when you put a target on the back of the rich and plough money into the least productive parts of the economy? We – and Reeves – are about to find out. This claims to be a Budget to rebuild Britain’s foundations, but its figures are a mirage. A front-loaded splurge on the NHS is paid for by a damaging tax raid and vastly increased state borrowing. Behind this short-term spending spree lurk implausibly low rises to spending on public services after 2025-26: 1.3%, amounting to a real terms cut. In other words, barring some sort of miracle, the Chancellor will be returning for yet more money in just a year or two. Instead of levelling with the British people about our unsustainable levels of spending, Labour have kicked the can down the road. Even after changing the fiscal rules, Reeves has delivered a Budget that barely squeaks through. Her paper-thin fiscal headroom means that the Office for Budget Responsibility (OBR) thinks it is little better than a coin toss whether Reeves will in fact meet her new, looser rules. No wonder the bond markets, after taking a while to absorb the yawning gap between Labour’s pro-growth rhetoric and the Chancellor’s ‘difficult decisions’, have responded with a thumbs down. Indeed, far from this Budget marking a line in the sand where Britain’s economy turns decisively European, with permanently higher levels of taxation and a larger state, its evident weaknesses show how unsustainable this social democratic approach really is. Even if we wanted to be like France, we would first need to build housing, infrastructure and an energy supply like France to keep the show on the road. With taxes up at unprecedented levels and debt interest spending now set to be larger than the defence budget, the only way out of this mess is growth. ✍️Marc Sidwell https://lnkd.in/eX8TmqVQ

  Today, Chancellor Rachel Reeves unveiled her first budget. Whilst the government have rightly increased investment towards housing and infrastructure, it is vital that the government continues to ensure that the United Kingdom remains an attractive country for investors and international businesses. You can read more about the Budget in this article from The Times: https://lnkd.in/ejX-tPYQ   #Budget2024 #EconomicGrowth #RachelReeves #Economy #UKPolicy

# The Critical Importance of Changing #Fiscal Rules in the UK's Next #Budget As the UK #Chancellor prepares for the upcoming Budget, one decision stands out as potentially transformative: the redefinition of fiscal rules. While this may seem an esoteric detail, it could unlock billions in investment and set the course for the UK's economic future. And here's an important detail to hang on to: According to the Office for Budget Responsibility, a 1% sustained increase in public investment can lift GDP by 2.5% over the long term. Here's why changing fiscal rules is crucial for the next Budget. ## Understanding Fiscal Rules Fiscal rules are self-imposed constraints that governments use to manage their finances responsibly. They serve as a commitment device, preventing governments from succumbing to the temptation of increasing debt for short-term political gain. However, not all fiscal rules are created equal. Badly designed rules can hinder rather than help economic growth. ## The Current Situation The UK's current debt rule requires "underlying" debt (public-sector net debt excluding the Bank of England) to fall as a share of GDP within five years. This rule has become a binding constraint, leaving £9 billion of "headroom" in the Budget. With public services under strain and investment needs growing, this limited fiscal space is problematic. ## The Case for Change  By adopting a different measure, such as public sector net financial liabilities (PSNFL), the UK could unlock up to £52 billion in extra investment annually. Even using half of this would allow public-sector net investment to remain at its current level of 2.5% of GDP, rather than falling sharply. The current debt rule ignores the value of assets created by long-term investments. A measure like PSNFL would account for both sides of the balance sheet, encouraging beneficial long-term investments. Changing the fiscal rules could allow the government to pursue strategic initiatives like the proposed National Wealth Fund, which involves borrowing to invest in financial assets. The UK faces significant challenges, including a £37 billion capital shortfall in the NHS, ambitious net-zero targets, and the need to deploy cutting-edge technologies in public services. More fiscal space is crucial to address these issues.By enabling more investment, new fiscal rules could boost economic growth. ## Why Now? The decisions made in the upcoming Budget will set the tone for the entire parliament. By changing the fiscal rules now, the Chancellor has the opportunity to revitalize the economy and public services. Failure to act could constrain the government's ability to meet its ambitions and leave the UK economy struggling to grow. As the Budget approaches, all eyes will be on the Chancellor to see if this opportunity is seized.

The Budget: Report by Wren Sterling The first Budget from a Labour government since March 2010, and the first ever from a female Chancellor, proved to be the defining event that had been widely anticipated. From the moment in late July when Rachel Reeves unveiled her “£22 billion black hole” and announced means-testing for the winter fuel payment, it was clear her Budget premiere would be a challenging one for both the government and the governed. As Budget Day neared, talk of the black hole was replaced by a steady flow of rumours about tax increases and also, to a lesser extent spending cuts, totaling as much as £40 billion. In addition, there were suggestions that government borrowing – already overshooting the March 2024 Budget projections by around £7 billion – would rise by £20 billion to fund NHS and infrastructure projects. In the event, the Chancellor delivered tax increases amounting to £41 billion by 2029/30. Read the full report here: https://lnkd.in/eynG6m3K #b4 #connectingpeople #budget2024 #taxes #reliefs #spending #revenue

New Fiscal Frontiers https://lnkd.in/dtmg7MNW Izak Odendaal - Old Mutual Wealth Investment Strategist Every year, the Budget Speech commands wall-to-wall media coverage. Most of this coverage asks something along the lines of “What does the Budget mean for the taxpayers, the economy and markets?” Increasingly, this question should also be asked in reverse. How does the state of the economy and the bond market influence the Budget? That is not to suggest that the Budget has no impact on the bond market. It clearly does since it determines the size of government borrowing, which is to say the supply of bonds...