Budget Press Releases – A Budget for growth?

Joe Nellis is MHA’s economic adviser
This Budget is unlikely to stimulate economic growth in the short-term, given the scale of tax increases hitting the corporate sector.

But the economy was already showing modest signs of recovery, and we can expect to see growth heading towards 2% in 2025 – an improvement from the flatlining of recent years.

However, interest rates are likely to fall slower than previously expected as a result of this Budget, although we still expect to see another cut before the end of this year. The scale of public sector expenditure, increases in the minimum wage, and the likelihood that national insurance charges will lead to higher costs of employment, will put some upward pressure
on prices.

There is also a danger that these changes in the private sector regarding national insurance and the minimum wage result in job losses, ultimately harming the ‘working people’ the Government had promised to set out to protect.

While the inflation peak of October 2022 was largely caused by external factors, and these have now calmed, inflationary pressures remain in the form of domestic wage growth. This Budget will have done nothing to alleviate these pressures and there is a risk of a continued wage-price spiral. This has been a concern of the Bank of England. As a result, the 2% inflation target is not likely to be met on a sustained basis for a few years

Autumn Budget 2024