PA ANALYSIS: Clouds gathering ahead of Chancellor’s Autumn Statement

As we enter winter there are clouds on the horizon for the United Kingdom economy and Chancellor George Osborne has to deliver his Autumn Statement against an increasingly murky backdrop.

PA ANALYSIS: Clouds gathering ahead of Chancellor’s Autumn Statement


From NHS doctors striking over money to a ramping up of conflict in Syria and all its related fallout, there is plenty to dent investor confidence in the UK and the prospects for its companies.

A vote on the UK’s EU membership is still waiting in the wings, and ‘Brexit’ is only getting likelier in the wake of recent events around migration and terrorism.

The expected squeeze on tax credits could be another drag on confidence and may hurt the UK consumer play that many investors have been making, should it prompt a tightening of purse strings in many households.

For much of the past five years the Conservative government has hung its hat on getting the public finances into shape after the profligacy of the preceding regime, but recently the books have taken a turn for the worse, meaning some belt tightening could be required.

That is of course before the possibility of greater spending on the military and the security services after the recent attacks is even factored in.

Patrick Schotanus, investment strategist at Kames Capital, is one observer who says the level of public borrowing is start to move in the wrong direction again.

“The weather is forecast to turn colder this weekend,” he said. “Today the UK treasury received its version of a chill.  October’s Public Sector Net Borrowing came in at £8.2bn, ahead of the consensus of £6bn. The larger deficit was mainly caused by lower corporate tax receipts which reflect the impact of the reduced corporate tax rate, despite increased profits.”


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