Chancellor Philip Hammond delivered the Autumn Budget back on 22nd November with the key message being reduction in growth and productivity forecasts along with an increase in the need to borrow. Having this as a backdrop goes someway to explain what was, for many, an underwhelming budget. It’s a shame that given the challenges the economy faces that greater measures weren’t offered.
First Time Buyers
There were positive messages for individuals: For first time buyers – Stamp Duty Land Tax (SDLT) on homes under £300,000 has been abolished thus 95% of first-time buyers who pay stamp duty will benefit. Low earners will benefit with The National Living Wage and the National Minimum Wage increasing from £7.50 per hour to £7.83 per hour. Over 2 million people are expected to benefit. Also the tax-free personal allowance will increase from £11,500 to £11,850 from April 2018.
Although there were some positive messages, forecasted reduction in debt and investment in the economy. There is also a focus on the technological revolution, education and the housing market. There remains some big challenges ahead for the economy and further measures may be needed. Although the markets were relatively unaffected by the announcements, talk of ‘below par growth’ and ‘sideways’ markets are predicted by many fund managers in the short term going forwards. The need for well diversified portfolios will be important to navigate the tougher conditions that look likely in 2018.