Personal investors have little to be excited about as Chancellor Rishi Sunak delivers his first Budget
“The Coronavirus Budget”
The Chancellor, The Rt Hon Rishi Sunak MP, presented his first budget today just a short time after taking office. The old adage suggests that a ‘week is a long time in politics’ and that is certainly the case at the moment. The Chancellor found himself somewhat overtaken by events and the budget, which should have been a chance for the recently elected Government to set out its stall, became the Coronavirus Budget and the emergency 0.5% cut in interest rates earlier in the day dominated the headlines.
For personal investors, the budget contained very little in the way of new measures or changes to taxes. Instead the budget focused on spending commitments to address Coronavirus and more fundamentally looking beyond the immediate challenges to the economy, to invest in infrastructure; more money for investment in railways, roads and technology, alongside more money for education, housing and the NHS.
The priorities reflected the Manifesto commitments of the Conservative Party but also mark a very significant shift from a period of austerity since the financial crisis to a point of very significant expansion in public spending. Investors will no doubt want to look to companies that might benefit from that substantial increase in public spending.
UK companies face challenges, compounded by the current Coronavirus outbreak. The Office for Budget Responsibility highlighted this in the reduced growth forecasts for the economy put together before the impact of Coronavirus. The Chancellor also confirmed the commitment to freeze rather than cut the rate of corporation tax at 19%, albeit that remains one of the lowest global rates.
In short, there was little to excite personal investors in this Budget. Personal investors wanted stability in the tax system and arguably the Chancellor delivered this with no changes in the Chancellor’s speech to ISAs and other investment incentives. Beyond that, personal investors will hope once the current challenges pass the Chancellor may, in his future budgets, address the things they wanted to see, in particular greater investment specifically in financial education and in incentives to encourage younger generations to save and invest.
These views are those of the author alone and do not necessarily reflect the view of The Share Centre as a whole.