October 30, 2024 15:13 GMT
UK FISCAL: Top Ten Budget Takeaways
UK FISCAL
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- Pressure on services inflation from minimum wage increases.
- Employer NI reformed with a smaller rate increase than expected - but will increase for the average salaried worker and low paid workers more than expected. A chunk of that will be passed on, particularly in lower paid service sectors.
- Investment double the level expected over 5 years (GBP100bln) - that is likely to be inflationary too in the medium term.
- Gilt remit up just under GBP20bln this year - broadly in line with expectations at GBP296.9bln.
- But CGNCR (the main driver of gilt issuance) over the following four fiscal years up a combined GBP91.3bln.
- So net-net over 4.5 years that is just over GBP110bln of additional gilt issuance - that is a huge number for the market to digest.
- The higher rate of the main capital gains tax (CGT) increased just 4ppt from 20% to 24%, with the lower rate of CGT cut (expected in the 30s).
- But there was also a 4ppt increase in CGT on carried interest to 32% (which was discussed initially but expectations had dampened).
- The non-dom tax regime has been replaced by a "residence based scheme"
- Pensions to be included in estates for inheritance tax purposes from April 2027.
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