FTSE 100 Live 6 March: ‘Budget will be shot in the arm’ for UK markets as Hunt unveils British ISA, shares up
The FTSE 100 is steady, as investors scrutinise Jeremy Hunt’s Spring Budget.
The Chancellor cut to National Insurance in a headline-grabbing move in what is expected to be an election year.
On the corporate side, Legal and General, Ibstock and Capita are among the companies reporting results, while Southend Airport owner Esken is to leave the London Stock Exchange as the Essex hub changes hands.
FTSE 100 Live Budget Day
National Insurance cut by 2p
British ISA welcomed
Fuel Duty frozen again
Budget key points: What did Jeremy Hunt announce?
Wednesday 6 March 2024 14:10 , Simon Hunt
In the last Spring Budget before a General Election, Jeremy Hunt gave the British public few surprises. But a cut to national insurance, and a chance to invest more money tax-free in UK companies, could be a boost.
What did Jeremy Hunt announce at this year’s Budget? Click here to read through all the key points.
Tax rise outlined in Budget for airline passengers in premium cabins
Wednesday 6 March 2024 16:04 , Daniel O'Boyle
Airline passengers travelling in premium cabins will be hit by a tax hike.
Chancellor Jeremy Hunt announced a “one-off adjustment” to the level of air passenger duty (APD) for those with non-economy tickets, such as premium economy, business class and first class.
In his Budget speech, Mr Hunt said the measure will “account for high inflation in recent years”.
'Back to square one' with no sign of 99% mortgages
Wednesday 6 March 2024 16:02 , Daniel O'Boyle
Danny Belton, Head of Lending at Mortgage Advice Bureau, rued the lack of a measure to boost first-time buyers, such as the rumoured 99% mortgage
Belton said: “It was looking promising for first time buyers for the Budget, but it seems we’re back at square one. While saving for a deposit isn’t the only challenge for FTBs, it is still a major blocker, and 99% mortgages would’ve been a good step towards helping thousands of prospective buyers get onto the property ladder.
Chancellor pledges to guarantee funding rates to nurseries for childcare offer
Wednesday 6 March 2024 15:55 , Daniel O'Boyle
The Government will guarantee funding rates to early years providers for the next two years to deliver its “landmark” childcare expansion offer, the Chancellor has said.
Jeremy Hunt said the extension of Government-funded childcare provision will mean an “extra 60,000 parents enter the workforce in the next four years”.
With under a month to go until the first stage of the rollout, Mr Hunt said: “I am guaranteeing the rates that will be paid to childcare providers to deliver our landmark offer for children over nine months old for the next two years.”
Watchdog goes into more detail on its scrutiny of Hunt's Budget
Wednesday 6 March 2024 15:11 , Michael Hunter
The UK’s fiscal watchdog is stepping out into the limelight this afternoon.
The Office of Budget Responsibility is offering up some detail on its scrutiny on what is likely to be the last set of tax and spending plans before an election this year.
You can see its main summary in the post on X below, and its full press briefing is on this link.
The March 2024 forecast at a glance#Budget2024 pic.twitter.com/PvBgK91T81
— Office for Budget Responsibility (@OBR_UK) March 6, 2024
National Insurance: Academic backing for Hunt's tax cut for workers
Wednesday 6 March 2024 15:02 , Michael Hunter
Away from the dealing rooms and think-tanks of the City, there is also backing for the Chancellor’s move to boost productivity by cutting National Insurance.
The headline measure of his Budget, the last before a general election expected this year applies to the tax paid by all workers,
Dr Luciano Rispoli , Senior Lecturer in Economics at the University of Surrey, said:
“The 2p decrease in NI contributions is what, in my opinion, will make the biggest difference to earners. This should stimulate employment but more importantly increase disposable income.
“In fact, even a tiny increase in disposable income will make a big difference to millions of financially squeezed households who have been struggling due to higher mortgage rates and cost of living.
“These are also the consumers with the highest propensity to consume, meaning that the UK economy will likely experience a significant economic boost.“
Budget will 'pique the interest' of tech sector
Wednesday 6 March 2024 15:01 , Daniel O'Boyle
Russ Shaw, founder of Tech London Advocates and Global Tech Advocates, and among the UK tech sector’s main voices, said the Budget will ‘pique the interest’ of the tech sector, but will need to be followed up with more steps.
He said: "Tax cuts formed the main focus of the Spring Budget, but there was also enough in the Chancellor’s plans to pique the interest of the tech sector.
“It was reassuring to hear the Chancellor emphasise his desire to help UK tech entrepreneurs start here and stay here, and unlocking more pension capital is certainly a worthwhile first step towards this. But this will need to be combined with a more comprehensive package of support for scaling our most innovative businesses, as well as a closer relationship with the Aquis and London Stock Exchanges, if the recent trend of high profile tech companies listing overseas is to be reversed.
“And while the Chancellor was right to identify technology investment as a key way to enhance the productivity of Britain’s public services, his desire for the UK to become the world’s next Silicon Valley seems incompatible with his vision of a ‘high skill economy not dependent on migration.’
“So much of Silicon Valley’s early success was built on opening the door to the brightest and best the global talent market has to offer. With only £7.4m for a new AI Upskilling pilot announced by way of reskilling programmes, overseas workers have a vital role to play right now in plugging the nationwide skills gaps currently hampering the sector’s growth.”
British ISAs 'a positive step' says wealth manager Charles Stanley
Wednesday 6 March 2024 14:57 , Michael Hunter
The Chancellor’s move to offer fresh, £5,000 tax breaks to individual savers prepared to buy British stocks are getting a qualified welcome this afternoon.
Garry White at wealth manager Charles Stanley, called the move “broadly positive” .
The firm’s chief investsment commentator added:
“The UK stock market is certainly cheap – with global investor attention on the growth stocks listed in the US. Compared with the US, share ownership is pretty low in the UK. The latest government figures show that the proportion of UK shares held by UK-resident individuals fell to 10.8%, down by 1.2 percentage points from 2020.
"To preserve the status of the city as a major financial centre we need to encourage investors to invest in UK companies. The tax breaks offered by these ISAs are a good move towards encouraging more equity ownership by UK residents. “
Chancellor 'dangerously close to breaking his own rules'
Wednesday 6 March 2024 14:54 , Daniel O'Boyle
Barret Kupelian, Chief Economist at PwC, says: “This Spring Statement was Westminster’s worst kept secret - most of the policies were leaked ahead of time and there were no major surprising changes to tax policy. So what were the Chancellor’s headline grabbing policies and what does this mean for the UK economy?
“Much like the Autumn Statement, the Chancellor focused on tax cuts, with his flagship policy focused on reducing national insurance contributions by a further two percentage points - a policy that is cheaper and more targeted than reducing income tax.
“However, as his starting headroom was limited, he did what most Chancellors are famous for - take with one hand and give with the other - to further fund his tax cuts. The most notable revenue raising measures he announced were around taxing on non-domiciled individuals, tobacco and vaping products, extending the energy profits levy and adjusting the Air Passenger Duty.
“On balance though, this means that the Chancellor’s headroom at the end of the fiscal period is very limited and thus is dangerously close to breaking his own rules. The OBR expects around £9 billion of headroom to remain - if fuel duty remains frozen, this would get it down to £4.5 billion, which is virtually a rounding error.”
London's theatreland applauds Chancellor for tax relief plan
Wednesday 6 March 2024 14:48 , Daniel O'Boyle
Some of the West End’s leading lights have welcomed the Chancellor’s decision to keep high rates of Theatre Tax Relief.
Jeremy Hunt used his budget to announce a new permanent rate for Theatre Tax Relief of 40% and 45% for productions that tour.
That is in contrast to the original plan to taper the rates to 35% and 30% from next April with a view to returning to the pre-pandemic rates of 25% and 20% in 2026.
New York stocks open higher as Fed chairman backs outlook for rate cuts
Wednesday 6 March 2024 14:46 , Michael Hunter
Wall Street stocks are rising in opening US trade, picking up from tech sector drops over the previous session.
The turnaround comes as the chairman of the Federal Reserve, Jerome Powell, signalled that rate cuts would be appropriate for 2024.
But the world’ top central banker also said the Fed would not be in a rush to reduce borrowing costs.
His remarks came in prepared written testimony before two days of questioning from Congress.
In opening trade, the S&P 500 added 29 points to , a rise. of 0.6% after a drop of about 1% yesterday.
'Shot in the arm' for the City
Wednesday 6 March 2024 14:40 , Daniel O'Boyle
Policy Chairman of the City of London Corporation, Chris Hayward said: "This Budget will provide a much-needed shot in the arm for UK capital markets. These measures will drive greater performance and secure better returns for hardworking British savers. The pension reforms unveiled by the Chancellor are integral to unlocking the full potential of investment in high-growth British businesses seeking to start and scale in the UK and internationally. Additionally, increased retail investment through the newly announced British ISA will further bolster participation in UK markets.
"Modernisation of the non dom regime is appropriate. We need to ensure that the changes are positive and proportionate, sending the right signal that the UK is a great place to live and invest.
"A sustainable plan for growth is imperative to forging a path to a high-wage, high-skilled economy."
Future tax hikes likely needed
Wednesday 6 March 2024 14:35 , Daniel O'Boyle
Paul Dales, chief UK economist at Capital Economics, says that fiscal tightening, likely including tax rises, could be on the way in the future, to make up for rises in fuel duty “that will never happen”.
The net fiscal giveaway of £13.9bn (0.5% of GDP) in 2024/25 in the Budget may at the margin help lift the economy out of its mild recession before an election later this year. But a big tightening in fiscal policy is still on the cards for after the election and that will probably require new tax hikes. The resulting drag on the economy may contribute to more interest rates cuts next year than most expect, to 3.00% from 5.25% now.
Furious West End bosses condemn Jeremy Hunt's "staggering" decision not to scrap "tourist tax"
Wednesday 6 March 2024 14:28 , Daniel O'Boyle
The Chancellor delivered a huge blow to the West End today when he decided not to restore VAT free shopping for foreign tourists to the UK.
Furious retail and tourism bosses said Jeremy Hunt’s refusal to restore the perk was “staggering” and would leave London hopelessly uncompetitive against rivals cities such as Paris and Milan.
Last month Mr Hunt asked the independent Office for Budget Responsibility (OBR) to carry a review of the policy -officially known as the VAT Retail Export Scheme - head of his Budget.
Lack of action on stamp duty upsets estate agents
Wednesday 6 March 2024 14:21 , Michael Hunter
More reaction is coming in on what Jeremy Hunt’s election year Budget did not say, now that City experts have had time to compare it to their wishlists.
The lack of action on stamp duty has not impressed property companies and estate agents, as the market continues to struggle after last years run of interest rate rises.
Sam Mitchell, CEO of online house sale site Purplebricks, called it “a missed opportunity for the government to stabilise the fragile recovery for 2024”, and said talk of potential action later cold actually prove damaging.
He added: “Jeremy Hunt should’ve acted now or not at all. Rumours will continue to build of cuts or increased stamp duty holidays, as they did following the Autumn Statement, which could wrongly and unnecessarily delay buying and selling decisions.
“The lack of a concrete decision leaves the market at a standstill, which is particularly damaging for first-time buyers looking to enter the market.”
Dominic Cummings sticks his oar in
Wednesday 6 March 2024 14:05 , Simon Hunt
The former government adviser has something to say, of course.
On budget day remember - ALL OBR and other official budget numbers are 100% FAKE cos of the tens of billions in hidden classified budgets from the total shitshow of our nuclear weapons program over 20+ years.
Fake budgets, fake debates, fake politics all the way down— Dominic Cummings (@Dominic2306) March 6, 2024
British ISA a 'questionable decision' - Paul Noble
Wednesday 6 March 2024 13:58 , Simon Hunt
Paul Noble, Partner at Blick Rothenberg, writes for the Standard:
The move to encourage investment in British shares via a British ISA is a questionable decision by Mr Hunt. The reality is that most advisors would suggest that a good investment strategy for savers to typically ‘spread their risk’ amongst different markets / countries and it is therefore very questionable as to whether this move will have any success.
It should also be noticed that the great majority of people who invest in ISAs aren’t actually utilizing their full annual ISA allowance anyway. As such, providing the opportunity for people to invest a further £5,000 in the British ISA (on top of the regular £20,000 limit) is simply going to be irrelevant to most smaller savers.
The introduction of the British ISA could give someone up to £26k in ISA savings per annum if they are also eligible for the Lifetime ISA. I question whether we need another form of ISA - wouldn't it have been easier to increase the £20k ISA allowance which has remained stuck at this level since 2017/18.
Read more about the ISA measures here
Market snapshot: Stocks keep their gains
Wednesday 6 March 2024 13:55 , Simon Hunt
After the end of the main Budget speech in the Commons, UK stock markets are continuing to trade higher and the pound is stronger on the day against the dollar.
Here are the main numbers on UK assets:
The top-tier FTSE 100 share index is up 28 points at 7674.37.
The mid-cap FTSE 250 stock benchmark is up 227 points at 19497.83.
The pound is 0.1% stronger on the day against the dollar at $1.2721
And sterling is flat against the euro at €1.1699.
The yield on 2-year UK government debt is at 4.623%; 5-year debt yields are at 3.964% and the benchmark 10-year bond yield is 4.134%.
'Disappointment' as no lifetime ISA changes
Wednesday 6 March 2024 13:54 , Simon Hunt
Some have expressed disappointment at the lack of changes to the Lifetime ISA, under which the government supports first-time buyers but only if they purchase a home under £450,000.
Martin Lewis writes:
No changes to Lifetime ISAs penalty for 1st time buyers buying homes over £450,000 I'm afraid.
As I've been campaigning on it, Chancellor told me just before the budget he said the reason he's not doing it "I wanted to do a big home ownership package but that doesn’t work…— Martin Lewis (@MartinSLewis) March 6, 2024
'More investment, more jobs, lower taxes': Hunt concludes Budget speech
Wednesday 6 March 2024 13:42 , Simon Hunt
Jeremy Hunt issues his final remarks on what could be his last major speech this Parliament:
“Madam Deputy Speaker we stick to our plan with a Budget for Long Term Growth. It delivers…More investment. More jobs. Better public services. And lower taxes.
“But dynamism in an economy doesn’t come from ministers in Whitehall. It comes from the grit and determination of people who take risks, work hard and innovate. Not government policies but people power. It is to unleash that people power that we have today put this country back on the path to lower taxes.
“A plan to grow the economy vs no plan. A plan for better public services vs no plan. A plan to make work pay vs no plan. Growth up, jobs up and taxes down. I commend this Statement to the House.”
Non-dom tax status abolished
Wednesday 6 March 2024 13:38 , Simon Hunt
Hunt has promised to replace the current tax regime for non-domiciled people who live in the UK and pay tax on UK earnings, while maintaining a main home overseas.
"The Government will abolish the current tax system for non-doms, get rid of the outdated concept of domicile and the remittance basis in the tax system, and replace it with a modern, simpler and fairer residency-based system," said Hunt.
As of April 2025, new arrivals won't be asked to pay tax on foreign income for four years. If they continue to reside here, they will "pay the same tax as other UK residents.
Hunt called it "a more generous regime than at present and one of the most attractive offers in Europe".
The move is one that may cause consternation in London's prime property sector, who rely on overseas investment to sell the capital's most expensive homes.
National Insurance: 2p or not 2p no longer the question as Hunt cuts the rate paid by all workers
Wednesday 6 March 2024 13:37 , Simon Hunt
In a widely trailed move, the Chancellor confirms the 2p cut to National Insurance.
He’s taken the main rate down to 8% from 10%, saving the average UK worker around £450 a year.
The move is expected to boost the labour supply in the economy, by making it pay to work more hours.
He made the same move in his last set-piece fiscal overhaul, when the Autumn Statement also included a headline-grabbing 2p NI cut.
It will apply from April 6.
Windfall tax on energy companies extended to 2029, raising £1.5 billion
Wednesday 6 March 2024 13:35 , Simon Hunt
Chancellor says that high energy prices after Russia’s invasion of Ukraine are lasting longer, extending high profits in the industry.
So he is keeping the windfall tax on the sector in palce until 2029, raising £1.5 billion.
There will also be legislation to abolish it if “market prices fall to the historic norm for a sustained period”
Shares in the sector shrugged off the news. BP stayed over 6p higher on the day at 477.3p. Shell is up 31p at 2483p
Household Support Fund extension welcome, says Martin Lewis
Wednesday 6 March 2024 13:34 , Simon Hunt
The Jeremy Hunt Household Support Fund extension is welcome, says Martin Lewis.
Household Support Fund extension by 6mths also welcome (probably will need extending again after). This is money for local councils to help the most desperate and the cost of living crisis means sadly there's high demand. Would've been awful to cut it off right now. #Budget2024…
— Martin Lewis (@MartinSLewis) March 6, 2024
ISA chance missed?
Wednesday 6 March 2024 13:32 , Simon Hunt
Kevin Brown, savings specialist at Scottish Friendly, says: “One missed opportunity was to broaden the scope of family ISA saving and investing across the generations.
“Our research has shown that 7 in 10 (68% of parents) want grandparents to be allowed to open a JISA for their grandchildren, however the current rules stipulate that it has to be the parent or the guardian that does this first.
“There needs to be a change to JISA rules to allow other family members, such as grandparents, to open them too. This would provide a boost to children's savings.”
Not enough properties available for long-term rentals
Wednesday 6 March 2024 13:27 , Simon Hunt
Hunt moves to reduced the number of properties available as short-term holiday lets
The Furnished Holiday Lettings tax regime "is creating a distortion meaning that there are not enough properties available for long term rental by local people" said Hunt.
"To make the tax system work better for local communities, I am going to abolish the Furnished Holiday Lettings regime."
Stamp duty relief abolished... for multiple homes
"I have also been looking at the stamp duty relief for people who purchase more than one dwelling in a single transaction, known as Multiple Dwellings Relief," said Hunt.
Intended to support investment in the private rented sector, Hunt said an external evaluation found "it was being regularly abused".It's now been abolished, too.
Government to up vape and tobacco taxes
Wednesday 6 March 2024 13:24 , Simon Hunt
Jeremy Hunt will up the tax on vapes, “to discourage non-smokers to take-up vaping”.
But tobacco duty will be incresased at the same time, “to maintain a financial incentive” for smokers to turn to vapes instead.
The measure continues the Government’s fight against the rise of vaping, after a ban on disposable vapes was announced earlier this year.
More govt spending needed, say economists
Wednesday 6 March 2024 13:24 , Simon Hunt
Olly Bartrum, the senior economist at the Institute for Government, says the 1% increase in real terms departmental spending is better than expected but still “problematic”.
Public services remain under huge strain, he warns.
Small businesses get boost from VAT tinkering
Wednesday 6 March 2024 13:21 , Simon Hunt
The compulsory threshold for VAT registration will be increased by £5,000 to £90,000.
Tax experts said the change would be a boost to small businesses close to the threshold, who faced little incentive to grow as they hit the ‘cliff-edge’.
Robert Marchant, VAT specialist and Head of Tax at Crowe UK, said: “The VAT cliff edge has been eroded (a little). The compulsory VAT registration threshold has been raised by £5k to £90k with effect from 1 April 2024.
“The Tax Policy Associates had previously calculated that 26,000 small businesses were deliberately restricting growth to remain beneath the registration threshold. This modest increase will therefore help some organisations to grow but it remains to be seen whether the change will go far enough.”
Fuel duty freeze a ‘step in the right direction’
Wednesday 6 March 2024 13:18 , Simon Hunt
Hunt’s move to freeze tax on fuel is getting some qualified backing from the car industry
Lisa Watson, director of sales at Close Brothers Motor Finance, called it “a step in the right direction” adding:
“It will come as some relief to motorists concerned about the soaring cost of driving from A to B.
“Whilst only likely to have a small positive impact, it’s a step in the right direction, particularly for the 53% of drivers who cite fuel prices as the biggest challenge in the next 12 months.”
Public sector spending growth target held at 1%
Wednesday 6 March 2024 13:17 , Simon Hunt
The Chancellor said the Government will keep its 1% target for public sector spending growth, rather than cutting it to 0.75%.
Hunt said: “I am keeping the plan for public sector spending growth at 1% in real terms, but we are going to spend it better.”
There were reports that Hunt may have considered cutting the rate to 0.75%.
The Government will also launch a “public sector productivity plan”, he said.
FTSE stocks edge up
Wednesday 6 March 2024 13:15 , Simon Hunt
Shares in airlines, energy companies and homebuilders are the biggest risers on the stock market. SSE is ip 36p at 1694p, Taylor Wimpey is up 3p at 142p. IAG, the owner of British Airways, is up 7p at 149p.
British ISA welcomed
Wednesday 6 March 2024 13:11 , Simon Hunt
Matt McKenna at personal finance site finder.com said: “The big question about the British ISA was whether it would eat into the existing £20,000 annual allowance or be added as an extra on top. The fact that the Chancellor has given an additional £5,000 to accommodate this is a sensible move and I respect the ambition of a British ISA.
“In my opinion, it is reasonable for the British government to try and stimulate growth in its domestic market and this ensures UK investors won’t have to curb their current foreign investment plans.”
Creative industries given additional tax relief
Wednesday 6 March 2024 13:08 , Simon Hunt
The Chancellor said he will up tax credits for visual effects firms in an aim to boost Britain’s creative industries.
He said: “We have become Europe’s largest film and TV production centre with Idris Elba, Keira Knightley and Orlando Bloom all filming their latest productions here. Studio space in the UK has doubled in the last three years. At the current rate of expansion, we will be second only to Hollywood globally by the end of 2025.”
The Government will also remove the 80% cap for visual effects costs in the Audio-Visual Expenditure Credit.
Tax reliefs for touring and orchestral productions will also be extended.
Hunt listens to City on ISA reforms
Wednesday 6 March 2024 13:05 , Simon Hunt
He said: “following calls from over 200 representatives of the city and our high growth sectors I will reform the ISA system to encourage more people to invest in UK assets. After a consultation on its implementation, I will introduce a brand new British ISA which will allow an additional £5,000 annual investment for investments in UK equity with all the tax advantages of other ISAs.
“This will be on top of the existing ISA allowances and ensure that British savers can benefit from the growth of the most promising UK businesses as well as supporting them with the capital to help them expand.”
Hunt will push ahead with NatWest sale as British Isa confirmed
Wednesday 6 March 2024 13:04 , Simon Hunt
The Chancellor will push ahead with plans to sell off the government’s remaining 34% stake in NatWest this summer. There will also be a new British ISA, which will have an additional £5,000 tax free investment allowance on top of present allowances.
On pension fund reform, he said: “I start with pension fund reform. I want our brilliant technology entrepreneurs not just to start here but to stay here, including when the time comes for a stock market listing. So we will build on the Edinburgh and Mansion House reforms to unlock more pension fund capital.
“We will give new powers to The Pensions Regulator and Financial Conduct Authority to ensure better value from Defined Contribution schemes by judging performance on overall returns not cost. We will make sure there are vehicles to make it easier for pension funds to invest in UK growth opportunities, so I am today publishing the names of the winners of the LIFTS competition
Building new homes for young people
Wednesday 6 March 2024 13:00 , Simon Hunt
Hunt promises to transform Barking Riverside and Canary Wharf with £242 million of investment, alongside investments in Blackpool, Sheffield and Liverpool.
"Together [this] will build nearly 8,000 houses as well as transforming Canary Wharf into a new hub for life science companies," said Hunt
"We are launching a new £20m Community Led Housing scheme supporting local communities to deliver the developments they want and need," he added.
Fuel Duty freeze ‘a step in the right direction’
Wednesday 6 March 2024 12:57 , Simon Hunt
The latest freeze in fuel duty was hailed as ‘a step in the right direction’ as the price of petrol has risen in recent months amid concerns about the Middle East and global shipping.
Lisa Watson, director of sales at Close Brothers Motor Finance, said: “Extending the ‘temporary’ fuel duty cut by 12 months will come as some relief to motorists concerned about the soaring cost of driving from A to B.
"Whilst only likely to have a small positive impact, it’s a step in the right direction, particularly for the 53% of drivers who cite fuel prices as the biggest challenge in the next 12 months.
“We’ve seen continuous hikes at the pumps over the last few months and this has added further pressure to drivers who already feel they’re faced with increased costs from all lanes, making car ownership difficult to afford for 62% of drivers. What is essential now is that this cut reaches drivers' fuel tanks and wallets.”
Hunt extents tax cuts for business investment
Wednesday 6 March 2024 12:56 , Simon Hunt
Business investment up to reach 10.6% of GDP this year, Hunt says.
He points to investment from Nissan , Google and Microsoft in the UK.
He extends “full expensing” tax breaks on investment spending to expenditure on leasing.
Debt will fall
Wednesday 6 March 2024 12:53 , Simon Hunt
OBR says debt as a percentage of GDP will fall in every year to just 94.3% by 2028-29. Underlying debt, which excludes Bank of England debt, will be 91.7% in 2024-25 according to the OBR, then 92.8%, 93.2%, 93.2% before falling to 92.9% in 2028-29.
Chancellor accused of 'taking credit' for BoE work on inflation
Wednesday 6 March 2024 12:52 , Simon Hunt
Professor Stephen Millard, deputy director of think tank NIESR, criticised the Chancellor for ‘trying to claim credit’ for the fall in inflation.
Millard said: “The Chancellor is trying to claim the credit for bringing inflation down. This is the job of the Bank of England's MPC and they should get the credit for this. Political interference in monetary policy is not something that we should welcome.”
Economy to grow
Wednesday 6 March 2024 12:50 , Simon Hunt
The OBR expects the economy to grow by 0.8% this year and 1.9% next year – 0.5% higher than their Autumn Forecast. After that growth rises to 2%, 1.8%, and 1.7% in 2028.
Pretty punchy UK GDP forecasts from the OBR, ahead of BoE and Consensus and even more bullish than we are for 2025.... pic.twitter.com/l5u6LSsMLx
— Simon French (@Frencheconomics) March 6, 2024
Fuel Duty frozen yet again
Wednesday 6 March 2024 12:47 , Simon Hunt
Fuel Duty will be frozen yet again, Jeremy Hunt has said.
The temporary cut to duty, introduced in 2022, will also stay in place. Fuel duty has been frozen every year since 2011.
Hunt said: “If I did nothing, fuel duty would increase by 13% this month”
In announcing the freeze, the Chancellor also took a swipe at Sadiq Khan, who he said has “tried to punish” motorists with measures like ULEZ expansion.
Alcohol duty freeze extended
Wednesday 6 March 2024 12:46 , Simon Hunt
Jeremy Hunt gave the pubs industry a boost as he extended the freeze on alcohol duty.
Hunt said: “I have decided to extend the alcohol duty freeze until February 2025.
“This benefits 38,000 pubs all across the UK – and on top of the £13,000 saving a typical pub will get from the 75% business rates discount I announced in the Autumn. We value our hospitality industry and we are backing the great British pub.”
Budgeting Advance Loans repayment period extended
Wednesday 6 March 2024 12:42 , Simon Hunt
The Chancellor will increase the repayment period for Budgeting Advance Loans, which are offered to those on Universal Credit to help them pay emergency costs.
Hunt said nearly one million people rely on those loans.
He said: “To help make such loans affordable, I have today decided to increase the repayment period from 12 months to 24 months,” he said.
Inflation to fall below 2%
Wednesday 6 March 2024 12:41 , Simon Hunt
Chancellor Hunt says according to OBR forecasts inflation will be below the 2% Bank of England target within months, which should allow cuts in interest rates and cheaper mortgages.
Inflation was 11% when he and Rishi Sunak took office.
Hunt says Govt given the average household £3,400 in cost of living support over the last two years.
‘Permanent cuts in taxation’ promised
Wednesday 6 March 2024 12:39 , Simon Hunt
Chancellor says he will help families “not just with temporary cost of living support, but “permanent cuts in taxation.”
Hunt promises 'lower taxes' as he opens Budget
Wednesday 6 March 2024 12:37 , Simon Hunt
At the start of his speech, Jeremy Hunt hailed the Conservative Party’s economic record, and hinted that tax cuts are set to be announced.
He said: “Growth has been larger than every large European economy, unemployment has haled and there are 800 more jobs for every single day we have been in office.
“Of course interest rates remain high as we bring down inflation,. But because of the progress we have made, we can help families not just with temporary cost-of-living support but with permanent cuts in taxation.
“We do this because lower taxes means higher growth.”
Budget about to start
Wednesday 6 March 2024 12:32 , Simon Hunt
PMQs has finished and Chancellor Jeremy Hunt is about to begin his budget speech. Stay tuned for live coverage and market reaction.
Market snapshot: UK stocks and the pound higher ahead of Budget
Wednesday 6 March 2024 12:04 , Michael Hunter
With around half an hour to go before the Chancellor Jeremy Hunt stands up in the House of Commons to deliver the Budget, here is a look at the state of play on the UK’s main financial markets.
The top-tier FTSE 100 share index is up 28 points at 7674.58.
The mid-cap FTSE 250 stock benchmark is up 151 points at 19422.83.
The pound is 0.2% stronger on the day against the dollar at $1.2726
And sterling is flat against the euro at €1.1699.
The yield on 2-year UK government debt is at 4.627%; 5-year debt yields are at 3.976% and the benchmark 10-year bond yield is 4.143%.
Could Hunt pull an income tax 'rabbit from the hat'?
Wednesday 6 March 2024 11:54 , Daniel O'Boyle
Neil Wilson of Finalto says that a cut to income tax is unlikely, but could be a surprise ‘rabbit’ from Jeremy Hunt’s hat.
More likely, however, would be an update to tax thresholds to ease the ‘stealth tax rise’ from fiscal drag
Wilson said: “Budget Day – what to expect from Wonky Wednesday? For policy wonks at the Treasury, it’s their big day out. Pre-election personal tax giveaways have been well leaked – eg NI cut by 2p again. There could be a more eye-catching income tax cut. A cut to income tax would be a bit of a rabbit – whether enough to swerve election wipeout remains to be seen. The risk is that, somewhat against character, Hunt announces a bunch of tax cuts that upset the markets. We have seen before that bond vigilantes are hunting in their packs again.
“I don’t think this is really going to happen and Hunt will lean again on fiscal drag to do the lifting, a particular bugbear when inflation and wage growth ought to have seen the levels change a lot since 2020. The tax rate will beat the post-war high of 37.2% of GDP in 26/27 or 28/29 depending on what Hunt does today – it will be breached no matter what, largely because of fiscal drag.”
Will we see an 'austerity budget'?
Wednesday 6 March 2024 11:48 , Daniel O'Boyle
Kathleen Brooks, research director at XTB, says the Chancellor is in a difficult position because of a lack of fiscal headroom.
Brooks says: “There is a chance that Jeremy Hunt could sacrifice the non-ringfenced public sector, for example defense, in order to build a war chest for future tax cuts if the Tories do win the next election. Public spending is only expected to rise by 1% from 2025, this could be reduced to 0.75%. This would leave Hunt open to accusations that this is an ‘austerity budget’, however, he may accept this in order to focus on the potential for affordable tax cuts down the line.
“As we have mentioned, there are plenty of evidence that voters prefer increases to public spending rather than tax cuts, but that does not appear to be Rishi Sunak’s game plan for this election.”
Market snapshot: Shares edge up ahead of Budget
Wednesday 6 March 2024 11:33 , Daniel O'Boyle
Take a look at our latest market snapshot with shares a little higher ahead of the Budget.
'Hunt should focus on long-term, not giveaways'
Wednesday 6 March 2024 11:29 , Daniel O'Boyle
NIESR economist Paula Bejarano Carbo says Jeremy Hunt should ‘focus on the long-term’, rather than ‘giveaways’:
She said “Today’s Spring Budget is taking place against a backdrop of low economic growth, as seen most notably by GDP per head being lower in the last quarter of 2023 than just before the pandemic (2019 Q4).
“While increasing real wages have improved conditions for many households in recent months, long-term economic prospects will remain weak without growth-enhancing fiscal policies, such as a commitment to increasing public investment. We therefore hope today’s Budget focuses on the long-term, rather than pre-election giveaways.”
Boosting the City should be 'key priority'
Wednesday 6 March 2024 11:23 , Daniel O'Boyle
Aster Crawshaw senior partner at international law firm Addleshaw Goddard says: ”Maintaining London as a leading global financial centre should be a key priority for any Government. The Chancellor has spent time listening to the City, and there are a range of measures which I would hope to see in the Budget."
“Phasing out the Bank Levy would provide a much needed boost to financial services and improve the overall competitiveness of the UK economy. The Chancellor could also give a boost to UK capital markets, providing support to companies that may seek to list in the UK, incentivising investment in UK equities and removing stamp duty on trading. Also, he could encourage a more risk based approach to financial services regulation – too many UK based businesses are choosing to make primary listings in other countries citing the UK's regulatory environment as ‘holding them back’.”
Eurozone retail sales 'in line with declining trend'
Wednesday 6 March 2024 10:52 , Daniel O'Boyle
Eurozone retail sales grew by 0.1% in January, in a sign that the currency union’s stagnation is continuing into 2024.
ING senior Eurozone economist Bert Colijn said: “The first hard data point for the eurozone economy in the first quarter did not provide reason for much optimism. Retail sales may have increased slightly after a sharp drop in December retail volumes but they are still well below the November level.
“This means that the January data point is still in line with the broad declining trend seen since late 2021.”
Unlike the UK, the Eurozone narrowly avoided a technical recession to end 2023, but there is little real difference between its economic performance and the UK’s, with both hovering close to the zero growth mark.
Battle for future of Southend airport draws to a close as Esken reaches deal with lender Carlyle
Wednesday 6 March 2024 10:48 , Simon Hunt
A protracted battle over the future of Southend airport today drew to a close after owner Esken bowed to pressure from its biggest lender Carlyle and agreed to wind down the business in a move likely to leave shareholders empty-handed.
London’s sixth airport had been in the hands of Esken, formerly known as Stobart Group, after it acquired the site for £21 million in 2008. But Southend was hit hard by the coronavirus pandemic, with the airport being forced to close to passengers for months on end after a number of high-profile airlines withdrew operations.
Esken saw its stock tumble as it became saddled with hundreds of millions of pounds of debt amid a struggle to keep afloat. The company was dealt another blow in January after its main lender, US private equity group Carlyle, accused the company of having breached the terms of a £194 million loan and demanded urgent repayment.
Esken initially tried to shake off Carlyle’s accusation and dispute its legal basis, with CEO David Shearer telling the Standard the lender was “seeking to get their hands on the airport on the cheap,” adding that the legal threat could upend the airport’s operations.
But the firm today said it had reached a deal under which Carlyle would become the majority shareholder of the airport after admitting it did not have the necessary funds to fight the company in court.
Government finances 'hemmed in on three fronts'
Wednesday 6 March 2024 10:39 , Daniel O'Boyle
Ahead of the Budget, Panmure Gordon economist Simon French gives his take on the state of the UK Government’s finances
Taxpayer's NatWest stake cut down again
Wednesday 6 March 2024 09:51 , Daniel O'Boyle
The Treasury has sold another 1% of NatWest, as markets hope that today’s Budget will provide more detail on the upcoming retail sale of shares in the bank.
The Government bailed out the Bank after the Global Financial Crisis, and has been selling down its stake ever since. It faced increased pressure to cut down its holding amid the controversy last year around the closure of Nigel Farage’s account with NatWest-owned Coutts.
The taxpayer’s stake in the bank is down to 31.85%, from 32.88%.
At the Autumn Statement last year, Jeremy Hunt revealed that the general public will be able to play a part in the sale of NatWest shares for the first time when a retail offering is launched this year.
NatWest shares are up 1.5% to 253.5p today.
Construction sector moves toward growth as PMI survey comes in ahead of forecasts
Wednesday 6 March 2024 09:37 , Michael Hunter
A closely watched barometer of the UK’s struggling building sector has come in a little better than expected this morning
The purchasing managers’ index for construction rose to 49.7. it was expected to read 49.0 and came in at 48.8 last time. The forward-looking survey predicts growth with a reading above 50, taking the hard-pressed sector to the brink of expansion today.
Construction has been hit by rising interest rates, making projects more expensive to finance and choking off demand in the house market.
The improvement will come as relief, with the Bank of England expected to cut borrowing costs later this year, further improvement could lie ahead.
Vimto owner gears up for record Ramadan; shares get a boost
Wednesday 6 March 2024 09:06 , Simon Hunt
Vimto owner Nichols is gearing up for its busiest trading weekend of the year as it prepares to sell as many as 25 million bottles of the iconic fruity drink during the season of Ramadan.
Vimto has become the go-to drink for Muslims observing Ramadan, with the Middle East accounting for around a third of its global exports as the firm celebrated its 100th Ramadan season in 2023.
CEO Andrew Milne said a targeted marketing drive, which included creating a new TikTok Arabia account, had helped boost sales by another 10% in the region during the year.
Nichols shares jumped as much as 7% today after it posted a 75% leap in pre-tax profits to £24 million, with revenues rising 3.5% to £171 million.
Milne said the firm’s cost inflation had come down to the mid-single digits following double-digit rises last year.
But he warned: “In the last couple of months consumers have been tightening their belts a bit. Interest rates are having a bit more of an effect.”
888 to pay $50 million to fold US operation
Wednesday 6 March 2024 08:33 , Daniel O'Boyle
William Hill owner 888 is set to close down or sell its struggling US sites and apps, paying $50 million for the rights to do so, after failing to find the same stateside success as rivals like Flutter and Entain.
The gambling giant launched in the US in 2021, a bit later than rivals, as states legalised online sports betting and online casino games. It signed a licensing deal with the owners of Sports Illustrated, using the iconic magazine’s name for its sportsbook.
But the business failed to gain any ground against rivals like Flutter-owned FanDuel and Entain-owned BetMGM. It launched in only four states and made only £20 million in revenue in 2022, good for a 0.2% market share. It never looked close to turning a profit, making a £12 million loss in 2022.
Now, it has launched a strategic review of the US operation, which could end in the sale or closing of the operation. 888 also offers some business-to-business services in the US, which will remain open.
FTSE 250 rises as consumer stocks cheer up; Premier Foods rallies on pension announcement
Wednesday 6 March 2024 08:24 , Michael Hunter
London’s mid-cap share index, commonly seen as providing more insight into the domestic UK economy, is making gains as investors wait for today’s Budget.
The FTSE 250 is 34 points higher at 19,305.45, a gain of 0.2%.
Consumer stocks are in the lead as the lead, with real estate and energy stocks providing support.
Premier Foods made the biggest single gain, up 15p to 154p, a rise of 10%, after it announced it could end payments to cut its pension scheme deficit earlier than expected.
It will boost cashflow at the maker of Bisto gravy and Mr Kipling Cakes by £33 million for 2025.
FTSE 100 holds steady in Budget day opening trade
Wednesday 6 March 2024 08:06 , Michael Hunter
London’s main stock market index is off to a sluggish start, with investors waiting for a sense of direction from the Budget.
It is widely expected to be the last set of tax-and-spending measures before a general election expected later this year.
Before the lunchtime rush of detail in the government’s financial plans, the FTSE 100 ticked down by a modest three points to 7,642.69
Chancellor Jeremy Hunt will outline his plans at around 12.30 p.m.
L&G in show of faith in London
Wednesday 6 March 2024 07:38 , Simon English
L&G, the biggest investor in the City with more than £1 trillion in assets, shows faith in under pressure London markets with pledge to up its divi by 5% a year.
New CEO António Simões, CEO, said: "Everything I have seen since joining the business in January has confirmed what attracted me to Legal & General. We have an authentic sense of purpose and stand out for our market-leading businesses, performance track record and strong balance sheet, delivered by talented colleagues.”
While other big investors wobble about the long term future of the City, L&G, around since 1836, saw profits for the year slump from £783 million to £457 million.
The CEO said: “ We remain confident in our ability to deliver resilient, organic growth, supported by our strong competitive positioning in attractive and growing markets. Our confidence in our dividend paying capacity is underpinned by the Group's strong earnings and strong balance sheet, which has Solvency II regulatory capital of £16.6bn: a surplus of £9.2bn in excess of a capital requirement of £7.4bn.”
The divi is up 5% to 20.34p a share.
New Capita boss promises "rapid reduction" in costs
Wednesday 6 March 2024 07:29 , Daniel O'Boyle
Outsourcing giant Capita, among the biggest beneficiaries of Government contracts, is to start a “rapid reduction” of costs to save £100 million, after swinging to a £107 million loss last year.
The business - one of the UK’s largest employers with a 43,000-strong workforce - lost £106.6 million as revenue dipped to £2.8 billion in a year in which the business was hit by a major cyber-attack.
CEO Adolfo Hernandez, who took over at the start of the year, said: “We need to deliver a rapid reduction in our cost base and are on track to deliver the net £60m annualised cost savings, from Q1 2024 as announced in November. Today we are announcing further material efficiency improvements of £100m to improve our competitive position.”
Capita announced 900 job cuts late last year.
Housing market slowdown takes a chunk out of brick sales at Ibstock
Wednesday 6 March 2024 07:27 , Michael Hunter
Ibstock, one of the UK’s biggest brick makers, cast fresh light on the impact of the slowdown in the UK housing market on building products suppliers today.
Brick volumes at the company fell by about 30%, cutting revenue in its Clay Division by just over a fifth to £292 million.
Overall group revenue fell by 21% to £406 million for 2023. Profit before tax slumped by 71% to £30 million, including the impact of a one-off charge of £30 million.
The firm took action to cut costs “and align capacity to near term demand expectations”. Annual savings came in at £20 million a year.
Southend owner Esken to be delisted after deal with Carlyle
Wednesday 6 March 2024 07:20 , Simon Hunt
The owner of Southend airport is to be delisted after reaching an agreement with lender Carlyle.
Esken, which was set to be taken to court by Carlyle over the repayment of a loan, has instead reached a deal in which Carlyle will become a 82.5% shareholder of the airport.
Any return for shareholders at the end of the process is likely to be negligible.
Esken said: “While there could have been the opportunity to pursue other sources of finance given more time, Esken did not have access to the financial resources to sustain it through what would have involved a protracted court battle.”
FTSE 100 on course for opening gains
Wednesday 6 March 2024 07:00 , Michael Hunter
London’s main stock market index is expected to make opening gains, with attention in the City set to shift to Westminster for the Budget.
It is likely be the last set of tax and spending measures before a general election expected this year. Chancellor Jeremy Hunt is expected to find room to cut National Insurance by 2p.
Such a move would save a full-time worker on a salary of £35,000 around £450 a year.
But it would also use up much of the government’s so-called “fiscal headroom”, the space in which it can make decisions on increased spending or lower tax rates.
Nonetheless, City experts are also expecting a package of tax cuts for motorists.
Beforehand, there are earnings due from Legal & General.
The FTSE 100 will rise by around 6 points according to futures trading, with its European peers expected to make. gains in Paris and Frankfurt.
Overnight in New York, tech stocks led a brisk retreat from the record highs last week on major indices. Apple fell almost 3%, with the near €2 billion fine from the EU casting a shadow over the stock. The Nasdaq Composite fell 1.7% and the S&P 500 lost 1%.
In Asia, stocks were mixed, with Hong Kong’s Hang Seng higher, Tokyo’s Nikkei 225 flat and India’s Sensex lower.
Recap: Yesterday's top stories
Wednesday 6 March 2024 06:37 , Simon Hunt
Good morning from the Standard City desk.
Yesterday’s agreed £1 billion takeover bid for Spirent Communications marks another dismal day for the City.
For how much longer can the top brass of the London Stock Exchange, led by CEO David Schwimmer, and the Treasury led by Jeremy Hunt look on while the stream of companies quitting London become a torrent?
Spirent, which older readers will remember as Bowthorpe, has been quoted in London for almost 70 years, and is a serious global player in a vital fast-growth sector, 5G communications, with a headquarters in Crawley.
To make things even worse, Mark Dixon, the boss of another huge UK success story, shared workplace provider Regus’s owner IWG, appears to be putting the finishing touches to a move to a listing in New York.
At this rate it is only a matter of time before one of the UK’s great FTSE 100 household names will up sticks in search of more exciting valuations overseas. That would mark a shattering blow to the prestige of the City, London and the UK as a whole. It cannot be allowed to happen.
Here’s a summary of our other top stories from yesterday:
Record revenues and profits at Greggs with sales up like for like 8.2% so far in 2024 and targetting 160 net openings this year
New car market records best February in 20 years with sales up 10% on 2023 says SMMT
Mirror and Express publisher Reach revenues fall 5.4% to £568m – print revs down just 2% to £439m, while digital revs tumble 15% to £127m, raising questions about whole company strategy.
Foxton profits fall as sales revenues in London slump by a quarter
Travis Perkins profits collapse by two thirds as housing downturn takes it toll
Hiscox delivers record profit before tax of $625.9 million
Bitcoin briefly rallies to all-time record before falling back down
London fintech Monzo valued at $5 billion in latest funding round with Google owner Alphabet one of the investors
