Tag: Jeremy Hunt

The Budget – Not Much in it for Investors

Jeremy Hunt’s first budget was a sober affair. No fireworks and little rhetoric which is as it should be. There was very little in it for private investors unless you have children or are still putting money into a pension.

The main points to note are that while tax allowances are still frozen, the £1.07 million pension cap is being dropped and the yearly allowance increased to £60,000. These should help highly paid folks such as medical consultants. The ISA allowance will remain at £20,000 for another year.

Fuel duty will remain frozen and the energy price cap will be extended for another 3 months.

Inflation is forecast to fall to 2.9% by the end of 2023 and we will avoid a recession this year after all. This should boost the stock market but hasn’t so far. Perhaps like me investors don’t believe that inflation will fall that rapidly because once it is entrenched and employees demand more in a spiral then it is difficult to stop.

As with all budgets there is lots of tinkering with grants for this that and the other where the Chancellor claims to be responding to public needs but it’s all virtue signalling and mainly a waste of time. For example £200 million to fix pot holes – the Chancellor clearly has no idea how much they cost to repair and the size of the backlog!

At least that’s my view.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson )

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Financial Stability It Ain’t

With the appointment of Jeremy Hunt as Chancellor, we have now had four different Chancellors in a matter of a few months. What will overseas investors who dominate the markets make of this?

It will surely not instil confidence in the stability of the UK and its financial management. Liz Truss has not helped by apparently backing tax cuts and then now back-tracking on those commitments. Corporation tax will now rise as originally planned making the UK a less attractive place to invest. The Truss “high growth” strategy is floundering.

The gilt market is gyrating as the Bank of England planned to halt further QE and then changed its mind to stabilise the market while the FCA has allowed pension funds to pursue risky investment strategies which led them into panic selling of property funds and other assets.

Let us hope Mr Hunt can halt this merry-go-round. But what future is there for Ms Truss as Prime Minister? Not a long one in my view. She has not demonstrated confident leadership and her public statements have been quite dire. In a few months I think she will be gone.

I have decided to join the Conservative Party so I might get some say in who will lead the Party in future. I have supported the Party in the past – for example I helped Boris Johnson become Mayor of London although that turned out to be a questionable decision after London became the cycling capital of the world and the road network was severely damaged. But I never joined as a Member.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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