Today, the brand-new Chancellor, Jeremy Hunt, has revealed he is reversing almost all the tax cuts announced in his predecessor’s mini-budget just last month. We get a round-up from Managing Partner Tony Bullock on the events of today.
Last month saw a real sea change in economic orthodoxy, with the biggest tax cutting budget for 50 years. What was intended to stimulate economic growth and release potential in the economy, just saw markets crashing to an all-time low against the foreign currency and called into question the government’s economic credibility on the financial markets.
The mini budget forced an unprecedented intervention by the Bank of England, which had to prop up pension funds as they faced demands for higher collateral at the height of the market mayhem.
Today, the new chancellor has made an official statement and delivered his plans to Parliament, ahead of October 31st medium-term fiscal plan, containing analysis from the Office for Budget Responsibility, to “reduce unhelpful speculation”.
The chancellor has announced that not only is he reversing the tax cuts, but he is also scaling back the support for energy bills after next April, a huge U-turn on the 2-years of support as originally planned, in what had been part of the new PM’s race for leadership promises. He stated that energy support will be subject of a Treasury-led review and more targeted towards the worse off.
In an emergency statement, the chancellor revealed:
The mini-budget tax cuts that will not be reversed, as they are already going through parliament, are reversing the increase in national insurance contributions and the stamp duty cut.
Mr Hunt promised: "Any support for businesses will be targeted to those most affected, and the new approach will better incentivise energy efficiency. The most important objective for our country right now is stability."
As Mr Hunt revealed the tax cut reversals, financial markets reacted positively, the pound strengthened, and UK government bonds rallied further.
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The Chancellor of the Exchequer's budget is set against a very challenging economic backdrop with a looming general election. The £400 billion bill for Covid and £100 billion bill for employment and energy support packages plus other financial headwinds (including much higher interest rates etc flowing from the discredited strategies pursued by the previous Prime Minist...
A round-up of todays’ Autumn Budget from Chancellor Jeremy Hunt, from Managing Partner Tony Bullock... The Chancellor sought to present a more upbeat assessment of the economy even than comparatively recent statements allowed, perhaps with the forthcoming election in mind. Included were some rather unexpected taxation changes, however, most major tax thresholds ...