Whatever your views on Rachel Reeves’s Budget, the conviction of the Chancellor’s delivery was a welcome antidote to the doom and gloom of the past few weeks.
- The scale of the tax and spending programme unveiled by Labour in this week’s Budget is unsurpassed in recent history, but markets appear to have reacted calmly – so far.
- Fears that wealth creation and entrepreneurialism would be hit hard were only partly realised, with smaller-than-expected rises in capital gains tax.
- With no rise in direct payroll taxes and a surprise extension of the fuel-duty freeze, we can expect consumer confidence to recover in the short term.
- While employers face a significant rise in their National Insurance burden, this should be partly offset by certainty over corporation tax rates in the medium to long term.
- Overall, the chancellor has done a good job of explaining how the government plans to promote growth and address declines in public services.
- Following a period of negativity and uncertainty, the Budget lays the groundwork for UK equities (and smaller companies in particular) to continue their upward trend.
This much-needed clarity around the government’s tax and spending plans – as well as a potential pathway to economic growth – should encourage buyers to return to the UK equity market following the recent hiatus.
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