By time of reading, we should know whether there is a new Prime Minister or a runoff among the candidates. Frankly, it doesn’t seem likely that any new or nearly new person will have great freedom of action given economic circumstances and gilt markets which always seem to be on the brink of a revolt.
Last Monday saw much of the previous Chancellor Kwasi Kwarteng’s programme reversed by the new Chancellor Jeremy Hunt.
Among other things, corporate tax will now rise steeply from next April and there will be no cut in basic rate tax. For now, the cut in national insurance remains so it will not change name to the health and social care levy. The IR35 reforms have also been scrapped.
Financial Adviser provides a handy, updated tax table here detailing the changes.
It does feel however that much still depends on the verdict of the Office for Budget Responsibility due to report on 31st October with some debate about when the Chancellor may respond given the choice of PM not – yet – being clear.
Whatever else there still appears to be a multi-billion hole in the public finances – roughly defined as getting to a debt position where things are not getting worse year on year.
There is some discussion that Hunt will maintain the income tax threshold freeze beyond 2026, a move even the FT describes as a stealth income tax rise.
The public will have to get more and more used to the term fiscal drag.
In other news, Ruth Handcock, CEO of Octopus Investments, questions how there can be 3000 ESG funds in Europe.
The Financial Conduct Authority (FCA) has suggested that 7.8 million people are finding it a heavy burden to keep up with their bills, an increase of around 2.5 million people since 2020.
As the cost-of-living crisis hits the housing market, 63% of UK adults fear the economic downturn could hurt their chances of getting a mortgage in the next 12 months, according to data from lender Together.
Ian Taylor, the CEO and founder of Transact has died, aged 58. He is hailed as a true pioneer in this New Model Adviser tribute. RIP.
