Share Prices & Company Research


23 November 2017

Hammond tries to maintain balancing act in “bittersweet” Budget

First-time buyers purchasing properties worth up to £300,000 will no longer have to pay stamp duty, the Chancellor of the Exchequer has announced today (22nd November 2017).

It was among a series of measures announced by Philip Hammond in today’s Autumn Budget, aimed at helping young people onto the housing ladder.

However, in a statement described by one commentator as “bittersweet”, the Chancellor also announced that economic growth had been downgraded by the Office for Budgetary Responsibility (OBR) over the next five years.

Among the Budget’s “long economic-y words” that Mr Hammond referred to in the speech, there was relatively little in the way of announcements for savers and investors, however, the government confirmed that Junior ISAs and Child Trust Funds will rise in line with consumer price inflation (CPI), with the annual allowance to increase from £4,128 to £4,260 as of April 2018. The annual ISA subscription limit will remain at £20,000.

Phillip Wong, investment manager at iour Leeds office, said: “Days before today’s Budget, Chancellor Philip Hammond outlined that his proposals would be ‘balanced’. Indeed, he has been given little headroom to manoeuvre, given the fragility of Brexit negotiations and infighting within the Conservative party, and after making a U-turn on increasing national insurance rates for self-employed last March, it appears that he has trod more carefully this time round.

“This Budget was built up on potential proposals on housing, and the headline-grabbing policy which resonated the most was the abolition of stamp duty for first time buyers for properties up to the value of £300,000. The Chancellor also outlined £44bn in capital funding to support the housing market over the next five years, and also plans for an inquiry into land banking which could prompt the government to intervene and get housebuilders to commence building.

“News of this review on land banking led shares in Barratt Developments, Persimmon and Taylor Wimpey down, although they later went on to recover some ground. Other key announcements, all in aid of putting a little bit extra into our pockets, included, from April 2018, an increase in the national living wage to £7.83 per hour and an increase in the personal allowance to £11,850. The young person’s railcard will also be extended to 26-30 year olds to help ease the squeeze on train passengers.

“Overall, this Budget was fairly light on content, and the state of the economy remains under some strain with growth forecasts for 2017 downgraded from 2 per cent to 1.5 per cent and further downgrades for subsequent years before rising again to 1.6 per cent in 2022. As we approach 2018, inflationary pressures remain a real threat to wage growth, and if we see further interest rate rises over forthcoming months, the measures proposed by the Chancellor to keep the economy ticking along could still be ineffective.”

Please note, our view does not constitute a recommendation to buy or sell the investments mentioned. Investments and income arising from them can fall in value and you may lose some or all of the amount you have invested. Past performance and forecasts are not a reliable indicator of future results or performance.

Hammond tries to maintain balancing act in “bittersweet” Budget
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