High net worth investors will, as usual, get very little direct help – unless he alters the ISA limits or makes changes to the EIS/VCT rules and regulations – but what they will be listening out for is any glimmer of good news. In effect, they want to hear anything that paints their investment environment as well as their living and working worlds in a positive light.
As we get to the end of the first quarter of the year, UK growth is flat at best following a drop of 0.2% in the last quarter of 2011. While the full year figures have yet to be confirmed, growth of below 1% is likely.
Inflation continues to fall, with CPI down to 3.6% (from 4.2%) and RPI lower at 3.9% (from 4.8%). But as oil, other energy and commodity prices are just starting to rise once again, these and other external pressures mean the prospect of inflation reaching the Bank of England’s 2% target may be put off until later this year at the earliest.
Interest rates have recently celebrated their third anniversary at 0.5% yet banks are pushing up their mortgage rates – at the same time as lending to small businesses is also falling. This all contributed to this morning’s announcement, from the Centre for Economics and Business Research, that UK incomes have fallen in real terms for the third consecutive year.
The next Budget could be a great indication of where Osborne will go next. Will he stick to his austerity guns or is it about time he brought in specific plans to deal with the specific issue of falling real incomes?
It is not an easy solution, and he has already proved it will certainly not be a quick one, but it would be great to see at least one Budget announcement that encourages either people to save/invest so we can then spend rather than borrow.
We cannot leave the austerity path completely but some indication of where exactly we are heading would be good to have in a few weeks time.
