Newsflash!

Budget March 2012

The Economy

The Independent Office for Budget Responsibility (OBR) has revised upwards the UK forecast for 2012 from 0.7% to 0.8%.   The forecast for 2013 is 2%, for 2014 2.7% and for 2015/16 3%.   UK inflation is set to fall from 2.8% for 2012 to 1.9% for 2013.

Pensions

WEF April 2013 a new single-tier state pension will be introduced to be set above the means test at a minimum of £140 a week.   The Government is due to examine linking the state pensions age to life expectancy.

Child Benefit

This will be phased out when someone in a household has an income of more than £50,000, decreasing by 1% for every £100 earned over £50,000.   Only those earning more than £60,000 will lose the benefit completely.

Tax

WEF 21 March 2012

  • there is a new 7% stamp duty on properties worth more than £2m
  • there are also plans (15% stamp duty rate on properties worth over £2m within corporate envelopes) to clamp down on stamp duty avoidance by using companies to buy expensive properties.

WEF April 2013

  • the 50p top rate of tax levied on earnings of £150,000 or more will be cut to 45p
  • the personal income tax allowance will be increased to £9,205
  • age-related income tax allowances will be removed for new pensioners and replaced with the same personal allowance as the rest of the UK
  • there will be a new cap on tax reliefs set at 25% of total income for anyone claiming more than £50,000 in a year
  • Corporation tax will be reduced to 24%, with a further 1% reduction in 2013 and in 2014.

There will also be a simplified tax return process for small firms with a turnover of up to £77,000.

WEF April 2013/14

  • the higher income tax band will be reduced from £42,475 to £41,450.

 

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Is there light at the end of the tunnel?

Tuesday, 01 September 2009 12:33
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After a prolonged period of negative news, there appear to be a few encouraging green shoots breaking through.  Since the lows of March 2009 (03/03/09 the FTSE100 fell to 3512, the lowest since 1960) equities now seem to be heading in an upward direction.  Is the worst behind us?

It is a matter of much debate as to whether this rally is a 'bear bounce' or the beginning of something longer lasting.  Whilst the pressure on banks has eased and governments have put in place a wide range of packages to help economies move out of the recession and ensure that the fragile green shoots of recovery keep growing, many businesses are still struggling and unemployment will continue to rise for sometime.  Deflation has struck the UK in recent months, but figures published in August 2009 point to an improvement in the manufacturing and service sectors and a rise in house prices.  The French and German economies have both grown by 0.3% between April and June 2009 and the Japanese by 0.9%, although economists fear that inflation will return threatening attempts to ward off recession in the UK. 

Andrew Milligan, Head of Strategy at Standard Life Investments, maintains that "the second half (of 2009) could see some modest improvement in consumer spending led by the US, where Obama tax cuts begin to take effect.  Some major policy stimulus announcements, including fiscal, monetary and regulatory changes, are beginning to challenge the considerable indebtedness of many companies and consumers".  Bill Mott, Manager of PSigma Income Fund, points out that "It is very hard to believe that just a few weeks ago UK headlines were universally negative.  As possible signs of economic recovery appear across the world, investors have been piling into economically-sensitive stocks".  He adds though, "We need to remind ourselves the global economy still faces many challenges."

Whilst we have seen a significant stock market recovery since March 2009, it is difficult to know when and where to invest, but the markets are presenting some of the best opportunities of the decade. 

Last Updated on Tuesday, 10 November 2009 14:10