Chancellor of the Exchequer’s budget announcement that was set for October 31 is now being pushed back to November 17. The long-awaited plan is set to address the nation’s debt issues, but is being delayed thanks to calmer markets allowing some economic breathing room.
This does not constitute advice and advice should be sought in all instances before acting on it.
After the chaos of the former PM and CoE’s fiscal policies, the ushering in of Sunak and Hunt has helped subdue the markets and lower borrowing costs, allowing the new leaders some time to get their plans sorted.
The new prime minister, Rishi Sunak, faces the challenge of addressing a £30-£40bn fiscal hole and is expected to do so through some possibly controversial tax cuts and rises, including the possibility of cuts to pensions and benefits.
Now that the Autumn Statement will be held on November 17, it will be a full statement that includes official forecasts and Jeremy Hunt has warned that there will be difficult choices to be made that will be debuting in the announcement.
The UK is not out of the woods just yet, though. Despite the fiscal gap being smaller than previously anticipated, Sunak reiterated that the country is facing a “profound economic crisis.”
In line with this sentiment, it is unlikely we will see benefits adjust to be consistent with inflation and whether or not pensions will rise according to the rules of “triple lock” remains to be seen. Truss appeared committed to the rules which dictate that the state pension increase every April in line with the highest of inflation, wage growth or 2.5%, and Sunak has declared that pensions will rise along with inflation, but only time will tell.
Limiting spending on public services could produce significant savings despite labour insisting this would mean years of austerity after the fact.
Now that the statement is delayed, the Office for Budget Responsibility will be able to use data from the beginning of October, which would have altered forecasts significantly. What will happen to interest rates as a result of this delay is that the Bank of England now has to contend with making their decisions without the knowledge of what the government intends to do to repair economic conditions.
Be sure to stay up to date with the country’s ever-evolving state of affairs and reach out to your trusted financial adviser to review your plans to see if any adjustments need to be made based on new policies once the Budget has been released.