Home Business The Morning Briefing: The mini-budget gamble

The Morning Briefing: The mini-budget gamble

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Good morning and welcome to your Morning Briefing for Friday 23 September 2022. To get this in your inbox every morning click here.


The gamble

The government is to unveil its plan shortly for the economy.

What is being described as a mini-budget is an understatement as it is set to unveil a massive range of tax cuts.

The objective of Liz Truss’s regime is to go broke for growth based on the argument that it has been anaemic for too long.

While the overall growth rate does matter the government’s strategy for achieving it is risky: massive tax cuts and borrowing.

This is at a time when inflation is high as is the cost of servicing debt.

Not to mention the weakness of sterling and the energy crisis.

The team here at Money Marketing will do the best to make sense of it for you.

The show is set to start at 09.30.

We have created a link to our landing page for all the coverage you can see below.


NI cuts

The government has already moved ahead with one of its biggest policy decisions.

The reversal of the National Insurance hike introduced by Boris Johnson and Rishi Sunak.


Growth plan 

Late last night (22 September) chancellor Kwasi Kwarteng showed us more of his economic vision.

He unveiled the Growth Plan, a package of over 30 measures, that aims to tackle high energy bills, drive down inflation and cut taxes to drive growth.

Kwarteng also wants to maintain responsible public finances.



Quote Of The Day

We expect that the recently announced fiscal package won’t be enough to spare the UK from the effects of the European energy crisis this winter, while elevated inflation – especially in non-discretionary spending items such as energy and food – has already eaten into real incomes and will continue to weigh on consumption in coming quarters.

– Silvia Dall’Angelo, senior economist at Federated Hermes, comments on the Bank of England’s interest rate decision



Stat Attack

A new report, commissioned by global communications agency Diffusion, shows Conservative party voters more in tune with Boris Johnson’s departing vision of accelerating investment in new renewable energy plants to help lower people’s energy bills in the years ahead.

73%

Of adults stated they would support the development of solar power plants within one mile of their home, in exchange for a 50% discount on their electricity bill

68%

Of Conservative voters made a similar statement

83% and 82%

It compares with 83% of Labour voters and 82% of Lib Dem voters

67%

Of all adults would support the development of new sources of wind power within one mile of their home, in exchange for a 50% discount on their electricity bill

59%

Of Conservative voters shared a similar view

79% and 78%

The figures for Labour and Lib Dem voters are respectively 79% and 78%

8% and 10%

8% of Labour voters and 10% of Lib Dem voters display support for the development of a fracking site within one mile of their property, even if they were to receive a 50% reduction in their electricity bill in exchange

29%

It compares to 29% of Conservative voters

17%

And 17% of the general population

Source: Diffusion

Octopus Investments, a part of Octopus Group, has launched a £20m joint fundraise for its two alternative investment market (AIM) venture capital trusts (VCTs).

This fundraising offers investors the opportunity to invest into both Octopus AIM VCT plc (AIM VCT) and Octopus AIM VCT 2 plc (AIM VCT 2). They both target a 5% tax free dividend yield every year.

They both aim to provide investors with long-term growth as well as income through their dividend policies.

The VCTs invest in a range of AIM listed growth companies across a diverse range of sectors such as pharmaceuticals, biotech, healthcare services, software development and clean energy tech.

The portfolios are made up of around 90 companies, more than half of which have been held for over five years.


Pacific Asset Management (PAM) has appointed Jonno Ross as associate director in the UK wholesale distribution team.

He will be responsible for the distribution of PAM’s single manager range of strategies.

Ross joins from Waverton Investment Management where he worked with institutional and wholesale investors across the UK, Europe and offshore markets.

He will work closely with the team to strengthen the distribution of PAM’s single manager range of strategies.

This range currently includes emerging market equity, emerging market equity income, G10 macro rates and longevity & social change.


From Elsewhere

UK may already be in recession – Bank of England (BBC News)

Five charts that will underpin chancellor’s mini-budget (The Guardian)

Why trade couldn’t buy peace (Financial Times)


Did You See?

We continue to keep a close eye on the relationship between the Chartered Insurance Institute and Personal Finance Society (PFS).

The latter’s members are calling for answers on the remaining £10m the Chartered Insurance Institute (CII) owes to the PFS.

The CII, which is the parent company of the PFS, was holding £19,969,000 on behalf of it.

A spokesperson for the CII told Money Marketing that the CII transferred £10m of this outstanding balance to the PFS in August.

PFS president Sarah Lord confirmed on 20 September at the PFS’s annual general meeting (AGM) the transfer of £10m on an account controlled by the PFS.

https://www.moneymarketing.co.uk/news/the-morning-briefing-the-mini-budget-gamble/

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