Chosen by us to get you up to speed at a glance
Britain's tax burden is on course to hit a new post-war record as Jeremy Hunt reaps billions of pounds more from a raid on workers, investors and businesses, official forecasts show.
The Office for Budget Responsibility (OBR) expects the UK to avoid a recession in 2023 as stronger tax receipts, tumbling energy prices and measures to get people back to work help the economy to avoid a prolonged downturn.
However, it warned that households still faced the biggest two-year squeeze in living standards on record.
Jeremy Hunt claimed the British economy was "proving the doubters wrong" even as he confirmed the first increase in the headline rate of corporation tax since 1974 from 19pc to 25pc.
The OBR said the increase will push corporation tax receipts as a share of the economy to its highest level since the tax was introduced in 1965.
Huge continued energy support is also expected to keep the size of the state at its highest sustained level since the 1970s, at 43.4pc of GDP.
The Chancellor unveiled more help on energy bills, a three-year tax break for businesses and more childcare help in his maiden Budget, as well as measures designed to incentivise work.
While the Office for Budget Responsibility (OBR), the government's tax and spending watchdog, still expects the economy to shrink by 0.2pc this year, it no longer believes it will enter a technical recession – defined as two straight quarters of economic decline.
This is a much shallower contraction than its previous forecast for a 1.4pc drop and year-long recession.
Instead, the economy is expected to shrink by 0.4pc in the first three months of 2023, before flatlining in the second quarter.
The UK is then expected to grow 1.8pc in 2024 and 2.5pc in 2025 as it recovers, before slowing to 1.9pc in 2027.
That's all from me. Why not wind down from today's excitment with some evening reading?
If you're just catching up with the Budget, here are the most important things you need to know.
Or hear it from the Chancellor himself:
If you missed my budget and my plan for how we’re going to grow the economy, here are 11 things from the budget in 60 seconds, start the clock 👀 pic.twitter.com/Ra06Opye24
Britain's debt management agency is preparing to sell the highest volume of government bonds since the pandemic.
£241.1bn of gilts need be sold during the 2023/24 financial year, according to the UK Debt Management Office (DMO).
It's the highest record since the £485.8bn of bonds sold in 2020/21.
With the Bank of England no longer buying government bonds, the DMO must now ensure its primary dealers – a group of 17 major financial institutions which have the right to take part in British government debt auctions – are not overburdened by the amount of debt they need to bid for and sell on to customers.
DMO chief executive Robert Stheeman said:
Behind the scenes, we're very focused on the duration risk and spreading that out, and make sure that supply doesn't unnecessarily weigh on the balance sheet capacity and the intermediation capacity of our primary dealers," Stheeman said.
We do what we can, while obviously needing to raise a very large amount of money.
In practice, that can mean a shift towards short-dated bonds with a maturity of under seven years.
"We can issue larger cash amounts in, for instance, a short-dated auction than in a long- or index-linked auction," Stheeman added.
Back to the Budget: Shadow Chancellor Rachel Reeves is unimpressed with Jeremy Hunt's fiscal statement…
This Budget was a chance for government to unlock Britain’s promise and potential.
But with growth downgraded, the hit to living standards the largest since records began, and a tax cut for the top 1% they are just papering over the cracks.
Labour will build a better Britain.
As is Jeremy Corbyn, the former leader of the Labour party…
Today, the Chancellor could have announced a wealth tax to give people a proper pay rise & save our NHS.
His failure to do so will prolong the suffering of those in poverty & deepen the crisis in our public services.
Inequality is a political choice, not an economic necessity.
Spread betting broker IG Group Stable's performance was weighed down by stabilising trading conditions in the last quarter.
Market volatility following Russia’s invasion of Ukraine and the increasing risk of a global recession boosted sales and client activity for trading platforms last year.
However, lower market volatility resulted in lower revenue per client last quarter, the company said on Wednesday.
Trading activity within IG’s stock trading and investments division dropped to pre-pandemic levels, even though the number of clients has since increased.
Meanwhile, revenues for its over-the-counter derivatives fell by 18pc due to lower market volatility during its third quarter ending February.
Its total revenue for that period dropped 7pc from £257.2m to £239m, compared with the previous three months.
The FTSE 250 company’s annual revenue and profit remains in line with market expectations, with its medium-term outlook unchanged.
Jeremy Hunt's three-year capital expensing policy should be made permanent if the Government wants to drive greater investment, especially among businesses with projects that have longer lead times.
Chris Sanger, EY’s head of tax policy, said:
The star of the Chancellor’s “E for Enterprise” was the immediate capital expensing for those businesses spending over £1m per annum on investment on new plant and machinery, costing over £10bn in 2024/25. This maintains the targeting of the super‑deduction, so will not be available to those buying second-hand equipment. It also applies at a rate of 50% to long life assets and various other assets.
Notwithstanding these constraints, giving £25 back for every £100 spent, is still expected to encourage greater investment, even if in reality it only represents a cashflow benefit. In practice, this represents a very slightly larger cash flow benefit than the super-deduction (which was £24.7 for every £100 spent), since it applies to a corporation tax rate of 25% not 19%.
The Office for Budget Responsibility estimates that this will boost annual business investment by almost 3.5% at the peak. Invest now, pay later, seems to be the Chancellor’s ethos here.
Whether this level of additional investment is achieved may depend on how confident business is that the Chancellor can make it a permanent measure.
He vowed to do so if it can be afforded. Limiting the relief to just three years helps the Chancellor to balance his books and actually generates extra tax receipts in 2027/28 as the timing effect reverses, but it doesn’t help businesses with investments that have long lead times.
Given that the Annual Investment Allowance already deals with projects below £1m, many of the target projects may well fall into this category. To get those businesses investing, the Chancellor may need to follow up on today’s announcement, but the sooner the better if he is to drive the greatest levels of investment.
Harry Potter publisher Bloombsury has upped its full-year profit outlook after book sales rebounded during the cost-of-living crisis.
A resurgence in reading has boosted Bloomsbury’s sales and profits for 2022, with particular demand for titles in print, ebook and audio.
The publishing house noted strong demand from both its fantasy novels and academic publishing division.
Bloomsbury now forecasts pre-tax profits of £30m for the year to February 28, up from initial expectations of £26.9m. Its revenue estimation has also been adjusted from £242.6m to £260m.
"Throughout a year which has been characterised by rising inflation and cost-of-living pressure, it is notable that reading remains hugely popular throughout the world with books regarded by many readers as an affordable pastime,” said Nigel Newton, chief executive of Bloomsbury.
Its share price jumped 8.45pc yesterday.
In case you missed it: the Budget also includes funds for local governments to fix up to 4 million potholes around the country.
A total of £200m has been set aside to help improve and maintain local roads, although the sum will also be earmarked for repairing bridges.
James Titcomb and Howard Mustoe have more details:
The number of pothole claims made by motorists has gone up by a third since 2016, according to data from Admiral Car Insurance published in January. At the same time, the average cost of pothole damage has surged by 16pc since 2021 – with the average cost for repair in the low thousands of pounds.
Local councils in England and Wales paid £8.9m in road user compensation claims in the year to March 2022, with four in five relating to pothole damage.
The funding move eases pressure on local councils, which with less central government funding, have had to cut some services, including filling potholes.
Research by the County Councils Network found that cuts plus the added expense of fixing roads as raw material prices surge means it would cost an additional £500m to press ahead with their original maintenance plans.
But according to the Asphalt Industry Alliance’s (AIA’s) annual ALARM survey it would now cost £12.6bn to fix potholes on all of England’s local roads, and take nine years to clear. In 2012, this figure was above £9bn.
Click here to see how much the fuel duty freeze is costing the Government
Fears held by small businesses over rising energy bills will not be "fully extinguished" by the Government's extended price guarantee, according to one of the UK's largest insurance providers.
Alan Thomas, UK chief excutive of insurance provider Simply Business, which covers both small businesses and landlords, said:
Small business owners are particularly vulnerable at the moment, and the Spring Budget is seen by many small business owners as an opportunity for the government to express its support for SMEs and the self-employed – a community which represents one of the most important contributors to the UK economy.
While important measures have been put in place, such as an increase in the Annual Investment Allowance to £1m and offering greater support in terms of childcare provisions, the fear remains that these new measures will only scratch the surface.
The cost of energy is front of mind for the majority of small businesses, with over half (54pc) saying this is the single greatest threat to their business in 2023. The three-month continuation of the Energy Price Guarantee will be welcome news, but SMEs up and down the country will still have very real concerns as to what comes after that.
Our research indicates that over a quarter (26pc) believe that they, quite frankly, will not be able to pay their bills in 2023. Despite the positive measures introduced, the worry is that many small businesses will not have seen these fears fully extinguished.
Accounting for over 99pc of all British businesses and 48pc of employment, our economy’s recovery is directly linked to SMEs prosperity, and we hope their continued support will present a win-win situation for UK SMEs and the Chancellor's aspirations for economic growth.
Stepping away from the Budget for a moment: infrastructure group Balfour Beatty has launched its third share buy-back scheme in three years, indicating its confidence in future growth prospects.
Britain’s largest construction company boosted turnover from £8.3bn to £8.9bn over 2022, while pre-tax profit jumped from £87m to £287m.
The FTSE 250 company announced a £150m share buyback scheme, boosting its stock price by over 3pc on Wednesday.
“The board’s confidence in both the short and longer term is reflected in its commitment to a multi-year programme of strong shareholder cash returns,” said Leo Quinn, Balfour Beatty chief executive.
The group’s work across the UK, US and Hong Kong means it is less exposed to challenges currently facing the housebuilding industry, with the value of its order book climbing 8pc to £17.4bn.
Major UK contracts include the ongoing HS2 and Thames Tideway projects.
More "bold policy thinking" is needed to help boost the UK's research and development offering, says a former special adviser to Prime Minister Theresa May.
Raoul Ruparel, director for Boston Consulting Group's Centre for Growth, commented:
The immediate question that springs to mind is: will this actually be a Budget for growth?
While several measures were included that surprised on the upside, it still lacked bold policy thinking that can facilitate future growth in areas that the UK is well placed on globally.
Obvious bright spots were around the supply-side labour market measures at a time of high vacancy and low unemployment rates, notably through the reforms to childcare and the incentivisation measures to get the over-50s back into the labour market.
Despite this, the Government can do more on both strategic investment and clarity of vision for where the UK aims to truly compete in the changing global economy. For instance, the 12-investment zones are approached purely through a levelling up lens, which detracts from the welcome renewed focus of them around areas of research excellence.
This somewhat confused picture means we aren't making best use of our existing, globally leading centres of excellence in R&D and innovation.
For the UK to compete in the high growth opportunities this government recognises will be critical to future economic success, it will need to find a way to rapidly channel investment into R&D and supercharge the UK’s existing hot beds, alongside the wider levelling-up agenda.
The UK’s advantages in a competitive global market are around R&D, innovation and ideas. These are the areas where businesses will want guidance from government and proper planning. Without this, we risk falling behind other countries who are already doing so.
The Budget lacked much longer-term industrial strategy that is needed to drive productivity and reduce carbon emissions, according to Siemens' chief executive.
Carl Ennis said:
Investment incentives and commitments to support regional growth are always good news, but we also need to be thinking much longer-term. It was good to hear the Chancellor reference an industrial strategy, but this remains the missing piece of the puzzle, which would give businesses the confidence to invest meaningfully in boosting economic growth, driving productivity and cutting carbon.
From a net-zero perspective, this will be vital to positioning the UK at the forefront of global industrial emission reductions. We’ve got the technology, it’s already here, we need a long-term framework that identifies priorities and delivers a stable policy environment.
The FTSE 100 has dropped 3.83pc to close at 7,344.45, as concerns over troubled bank Credit Suisse dragged down major lenders.
Fallers include HSBC (down 5pc), Lloyds (down 2.96pc), Natwest (down 6pc) and Barclays (up 8.97pc).
The blue-chip index shed 292.66 points today, pushing it even further from last month's high score of 8,047.06.
The broad-based FTSE 250 index sank 2.63pc to 18,625.85
The Chancellor's partial walkback on R&D tax credits is particularly welcomed by small businesses in the life science sector.
Mayer Schreiber, chief executive of Discovery Park, the 220-acre science and innovation park in Kent, said:
SMEs spending more than 40pc of total expenditure on R&D can claim back £27 of every £100 spent. This will make a significant difference to the future success of the sector, with the £1.8bn package of support strengthening the UK’s case to be the most exciting place for life science investment.
Many life science companies can be cash-intensive especially during start-up, and the changes to the Super Deduction system, ensuring full capital expensing, will be welcomed.
However, many companies will be disappointed by the decision not to reform business rates, coupled with the planned Corporation Tax rise from 19pc to 25pc, which may dampen growth just when he wants it most.
Meanwhile, in other news: profits have dipped for Apple supplier Foxconn as consumer demand for electronics slumps.
The Taiwanese manufacturer, which assembles Apple’s iPhones and Mac computers, recorded a 10pc year-on-year decrease of net income to NT$40 billion (£1.08bn) last quarter.
Foxconn’s production of premium iPhones was disrupted after a coronavirus outbreak at its Zhengzhou factory prompted protests by employees against working conditions.
The company expects consumer spending on technology to remain weak over 2023, with Foxconn’s sales in February 12pc lower than the previous year.
However, the company hopes this will be offset by an uptick in sales of cloud and networking products, as well as electric vehicles hardware.
The company, also known as Hon Hai Precision Industry, is to build electric vehicle battery packs in Ohio and Wisconsin as part of US expansion plans.
New measures in the Budget mean crypto investors will be required to separate details of their income and gains from digital assets on their tax returns.
Christine Cairns, tax partner at PwC, said:
As expected, there were no changes to headline tax rates or allowances despite pressure from some for tax reductions. The Chancellor has remained committed to his policy of boosting tax revenues through fiscal drag, particularly from higher earners and investors, and has in fact introduced very few personal tax changes with a few targeted exceptions.
“However, included within the detail of the policy documents is an announcement that income and gains from crypto assets will need to be reported separately on the self assessment tax return. This signals continued HMRC focus on how these assets are being reported by investors and taxed appropriately.
Abolishing the lifetime allowance cap will result in "short-term pain" for individuals, trustees and employers before any long-term benefits are noticed.
Michael Aherne, pensions partner at Herbert Smith Freehills, said:
The abolition of the lifetime allowance is the biggest single act of tax simplification in years. However, in the short term it creates significant uncertainty and complexity. Individuals who have previously had to pay large lifetime allowance tax bills may also feel particularly hard done by if nothing is done for them.
With that in mind, it is critical pension providers and trustees alert individuals who have exceeded the lifetime allowance and who are preparing to access their pension benefits imminently that they may be better waiting until after 6 April. Trustees also need to consider the impact the abolition of the allowance will have on their scheme, particularly where benefit accrual has been limited by reference to the lifetime allowance.
Employers who have seen experienced and highly skilled workers being forced to retire early or work part time due to the lifetime allowance will welcome this change. However, they will clearly need to review any arrangements they have put in place to mitigate its impact for higher paid staff. They will also need to consider how the increase in the annual allowance impacts their remuneration and reward packages for such staff.
It would also be helpful for government to clarify as soon as possible what the position of individuals with protections, such as fixed protection, will be. No doubt trustees and administrators will soon be fielding calls asking whether they can start pension saving again without losing all the benefits of those protections. The position is not currently clear.
Okay, that's enough Budget excitement for me. My colleague Adam Mawardi will take over from here.
Just a reminder that stock markets have sunk around the world today on renewed fears of a burgeoning banking crisis as Credit Suisse led a rout in shares of major lenders.
The Swiss bank's shares slumped by as much as 30pc on Wednesday after its largest shareholder said it could not provide further support, prompting the Swiss bank's chief executive to make new assurances on its financial strength.
Bank shares tumbled across Europe, with Barclays, Germany's Commerzbank, France's BNP Paribas and Societe Generale shedding between seven and 11pc.
On Wall Street, JPMorgan Chase fell 4.7pc, Citigroup lost 5pc and embattled regional bank First Republic sank more than 17pc.
The FTSE 100 has fallen 3.1pc, the FTSE 250 is down 2.2pc, while in the US, the Dow Jones Industrial Average has slumped 1.5pc, the S&P 500 has dropped 1.3pc and the Nasdaq Composite has fallen 1pc.
In a blow to ministers on Budget Day, EDF has turned down a Government request to keep its coal power plant in Nottinghamshire available in case of emergency next year.
The energy giant said that its West Burton A site – which sits between Doncaster and Lincoln – "will close as planned on 31 March 2023, in line with the agreement signed last year".
The site was initially meant to be retired last year, but was kept in service amid the energy supply pressures, however EDF said it would now be "very challenging" to repeat the deal for another winter. EDF said:
For example, retaining suitably qualified and local personnel to ensure safe operation was a major challenge last year and, looking forward, becomes untenable as many of the workforce have stayed on well beyond planned retirement dates already.
Approximately half the staff are retiring by the second quarter of this year. Notices have already been given for around half of these and they leave early April. This includes a large part of the station leadership team.
The Government requested that National Grid's Electricity System Operator should reopen negotiations with EDF and Drax to keep their coal plants on standby for another winter.
Business groups have said their members will struggle to keep their doors open from next month as the Government ignored calls for extra support to help companies pay their energy bills.
Despite extending current support levels for households, the Chancellor did not promise anything new for businesses.
Companies are set to see their energy bills soar from the start of April as the current more generous support package is slashed.
Emma McClarkin, chief executive of the British Beer and Pub Association, said: "As April 1 rapidly approaches, businesses are also nervously awaiting what's next for their energy costs and a lack of support in today's announcement will have a direct impact on their ability to keep their lights on and doors open."
The Chancellor did not mention business energy bills at all in his speech to the Commons on Wednesday afternoon.
British Chambers of Commerce director general Shevaun Haviland said businesses will struggle to pay their bills, potentially undermining the Chancellor's hopes that British businesses will invest more in the economy.
Kate Nicholls, the boss of UKHospitality, said: "Maintaining current levels of energy support to consumers, freezing fuel duty and inflation reducing will help hard-pressed households, and increase disposable income, which will be a huge boost for venues in desperate need of trade.
"This will be particularly needed as the sector is still set to see huge energy price increases when current support ends in April, which unfortunately was not addressed."
Oil has plunged to its lowest level in 16 months as Russian production defies predictions of a slump.
Brent crude has dropped by 5pc and is on its way towards $73 a barrel, its lowest since December 2021, as a report from the International Energy Agency said global oil markets are contending with a surplus.
Oil stockpiles have climbed to the highest in 18 months, with Russia managing to increase output last month despite warnings it would buckle under international sanctions, the Paris-based organisation said in its monthly report.
Demand growth, while set to pick up, remains subdued amid lingering fears of recession.
US-produced West Texas Intermediate has slumped 5.2pc below $68 a barrel.
The lifetime cap on pension saving is set to be abolished, in a shock move by Chancellor Jeremy Hunt as he unveiled a package of reforms designed to encourage older people to return to the workforce.
Now you can use our calculator to see how the Budget affects your pension.
The lifetime allowance (LTA) caps the amount that workers could save into their pension tax-free at £1.073m. However, the LTA charge will now be removed starting from April 2023, and abolished entirely from April 2024.
Speaking to the House of Commons, Mr Hunt said that he recognised that the strict pension tax rules had triggered an exodus of senior doctors from the NHS.
"As Chancellor I have realised the issue goes wider than doctors,” he said. “No one should be pushed out of the workforce for tax reasons."
People who earn more than £300,000 are the "secret winners" from Jeremy Hunt's Budget, a tax advisory firm claims.
The Chancellor revealed he will increase the minimum tapered allowance to £10,000, up from £4,000.
The figure is the minimum level of tax relievable pension contributions.
Nimesh Shah, chief executive of tax and advisory firm Blick Rothenberg said: "The £6,000 increase will be worth an additional £2,700 of tax relief to someone earning over £360,000.
"Quite perversely, a minority of very high earners will be some of the biggest winners from today's Budget announcements."
Pensions big changes to limits (3)
PLUS he didnt say but Money purchase allowance up from £4k to £10k. This is the amount you can put in your pension once you've already taken some of it. #Budget2023
While the Chancellor was delivering his speech, a former Bank of England Governor was giving evidence to a committee of MPs.
Mark Carney, the United Nations Special Envoy on Climate Action and Finance, said he did not think the collapse of Silicon Valley Bank would have a "material" impact on the availability of capital for climate-related technologies.
He said: "I don't foresee that this is material for the availability of capital for climate tech."
California-based Silicon Valley Bank, which focused on lending to technology companies, failed on Friday following a bank run.
Chancellor Jeremy Hunt has announced sweeping reforms to childcare funding in an attempt to help parents return to the workforce.
The funding boost could save parents thousands of pounds every year, but not all will be eligible for the help.
Rachel Mortimer outlines why some families will have to wait until 2025 to benefit from the announcement.
UK house prices will fall 10pc from their peak in the fourth quarter of 2022, the Office for Budget Responsibility predicted.
Property transactions will drop by 20pc relative to their peak in the same quarter, the government's fiscal watchdog said Wednesday in an economic outlook to accompany Chancellor Jeremy Hunt's annual budget.
The OBR said: "Low consumer confidence, the squeeze on real incomes, and the expectation of mortgage rate rises to come are expected to contribute to continued falls in house prices and a reduction in housing market activity."
The Budget has done little to halt the pound tumbling further against a strengthening dollar.
Markets have fretted about the state of the European banking system as fallout from the collapse of US tech lender Silicon Valley Bank gathered pace.
Shares in Swiss lender Credit Suisse plummeted almost 25pc after its largest investor said it could not provide more financial assistance to the bank.
The drop in Credit Suisse shares led the wider European banking index lower, triggering demand for the safe-haven dollar and away from high-beta currencies such as the pound.
The pound was last down 0.8pc against a broadly stronger dollar and is sitting above $1.20, having hit a one-month high of $1.22 on Tuesday.
Business rates were barely mentioned in the Chancellor's Budget.
Shevaun Haviland, director general of the British Chambers of Commerce, said:
The Chancellor has acted to address the unfilled jobs blighting our economy.
It is especially good to see the help on childcare and for over 50s workers.
The plans for full capital expensing are also a step in a right direction to offset the rise in corporation tax, but the jury is out on how much it will help businesses compared to the Super Deduction scheme.
Almost half of businesses have told us they will struggle to pay their energy bills from April, and they cannot invest when they are fighting to survive. There is little in today’s announcement that will provide comfort to these firms.
The Government also failed to reform business rates which we have repeatedly called for.
If the UK’s innovative growth industries are to remain competitive on the world stage, then Government must shift the dial further on investment, both within the UK and from overseas.
Theatre bosses "unequivocally welcome" the Chancellor's decision to maintain the higher rate of Theatre Tax Relief for the creative industries.
Sir Howard Panter and Dame Rosemary Squire, joint chief executives of Trafalgar Entertainment, one of the largest theatre companies in the UK, said:
This decision recognises the significance and cultural impact of the theatre industry in our society, and the importance of the sector's valuable contributions to the wider economy.
These higher rates of Theatre Tax Relief will act as a stimulus for future investment, job growth, and economic prosperity, both locally and nationally. It will also provide a major boost to touring productions with increased producer confidence, and greater choice overall for audiences.
The news will be a welcome relief for the Arts, tourism and hospitality sectors which have all suffered immeasurable blows in recent years as a result of the pandemic, the cost-of-living crisis and soaring energy prices.
But most of all, it's a huge win for the millions of people across the UK who access and enjoy cultural activities every week in their towns and cities.
A quick recap then on what was announced in Chancellor Jeremy Hunt's Budget statement in the House of Commons.
There is much more. For a full guide to the Budget, at a glance, click here.
Neil Birrell, chief investment officer at asset manager Premier Miton Investors, said:
The Chancellor's Spring Statement projected a more positive outlook on the economy in terms of growth and inflation than previously expected.
He was even upbeat on the level of debt as a percentage of GDP. But the path to get there looks rather bumpy as of today; a lot will need to go smoothly.
Notwithstanding that, measures were announced that are positive for growth, including the actions on employment.
The pension fund reforms went further than expected and are a positive factor.
However, all the good could easily get undone if the global issues around the banking system, interest rate increases and possible looming recession prove too much of a headwind; that’s quite possible.
BT shares have surged after the Chancellor announced a new policy of "full expensing" to replace the popular super deduction.
The telecoms giant is up 2.3pc on the day after Mr Hunt's announcement of the plan, to be introduced over the next three years "with an intention to make it permanent as soon as we can responsibly do so".
The new scheme means every pound a company invests in IT equipment, plant or machinery can be deducted in full and immediately from taxable profits.
This is a huge boost for BT and its roll out of superfast broadband through its Openreach division.
Mr Hunt said it is a corporation tax cut worth an average of £9bn a year for every year it is in place.
The OBR says it will increase business investment by 3pc for every year it is in place.
Mr Hunt said: "This decision makes us the only major European country with full expensing… …and gives us the joint most generous capital allowance regime of any advanced economy."
Institute for Fiscal Studies (IFS) director Paul Johnson tweeted that the childcare changes probably about doubles childcare spending.
Extending free childcare to all children over 9 months really is a big extension of the welfare state. Prob. about doubles childcare spending. We've been edging in this direction for a good 20 years. This is a new leg of the welfare state finally nearing its end point.
The Chancellor's Budget was "dressing up stagnation as stability", Labour leader Sir Keir Starmer said, claiming it put the country "on a path of managed decline".
The Labour leader said Mr Hunt's "boasts" about lower inflation were "ridiculous", adding: "The idea that it's a tax cut, British people can see through that.
"They see their tax burden at its highest level for 70 years and they know it's not the Government that's lowering inflation, it's working people, earning less, enjoying less, it's their sacrifice that is helping to bring inflation down; and they deserve better than another cheap trick from the Government of gimmicks, making them pay whilst trying to claim the credit."
Jeremy Hunt concluded his speech by saying that in November he delivered stability and "today it's growth".
He told the Commons:
We tackle the two biggest barriers that stop businesses growing – investment incentives and labour supply.
The best investment incentives in Europe. The biggest ever employment package. For disabled people, more help. For older people, barriers removed.
For families feeling the pinch… …fuel duty frozen. …beer duty cut. …energy bills capped. And for parents, 30 hours of free childcare for all under 5s.
Today we build for the future with… …inflation down …debt falling …and growth up.
The declinists are wrong, and the optimists are right. We stick to the plan because the plan is working. And I commend this statement to the House.
The Chancellor announced 30 hours of free childcare for all under-5s from the moment maternity care ends, where eligible.
Jeremy Hunt told the Commons:
I today announce that in eligible households where all adults are working at least 16 hours, we will introduce 30 hours of free childcare not just for three- and four-year-olds, but for every single child over the age of nine months.
The 30 hours offer will now start from the moment maternity or paternity leave ends. It's a package worth on average £6,500 every year for a family with a two-year-old child using 35 hours of childcare every week and reduces their childcare costs by nearly 60pc. Because it is such a large reform, we will introduce it in stages to ensure there is enough supply in the market.
Working parents of two-year-olds will be able to access 15 hours of free care from April 2024, helping around half a million parents.
From September 2024, that 15 hours will be extended to all children from 9 months up, meaning a total of nearly one million parents will be eligible. And from September 2025 every single working parent of under 5s will have access to 30 hours free childcare per week.
As part of his plans to get older people back into work, the Chancellor announced plans to abolish the pensions lifetime allowance limit.
Jeremy Hunt told the Commons: "Finally, I have listened to the concerns of many senior NHS clinicians who say unpredictable pension tax charges are making them leave the NHS just when they are needed most. The NHS is our biggest employer, and we will shortly publish the long-term workforce plan I promised in the Autumn Statement. But ahead of that I do not want any doctor to retire early because of the way pension taxes work.
He added: "As Chancellor I have realised the issue goes wider than doctors. No one should be pushed out of the workforce for tax reasons. So today I will increase the pensions annual tax-free allowance by 50pc from £40,000 to £60,000.
"Some have also asked me to increase the lifetime allowance from its £1 million limit. But I have decided not to do that.
"Instead I will go further and abolish the lifetime allowance altogether."
Mr Hunt said the changes would "stop over 80pc of NHS doctors from receiving a tax charge" and incentivise "our most experienced and productive workers to stay in work for longer".
Jeremy Hunt said he wanted to reform the childcare system, warning: "We have one of the most expensive systems in the world. Almost half of non-working mothers said they would prefer to work if they could arrange suitable childcare.
"For many women, a career break becomes a career end. Our female participation rate is higher than average for OECD economies, but we trail top performers like Denmark and the Netherlands. If we matched Dutch levels of participation, there would be more than one million more women who want to work, in the labour force. And we can."
On childminders, Mr Hunt said he wanted to address the 9% decline in one year in England, adding: "I have … decided to address this by piloting incentive payments of £600 for childminders who sign up to the profession, rising to £1,200 for those who join through an agency."
One of the more eye catching of the Chancellor's early announcements in his speech was when he turned his attention to pubs.
He has frozen a planned rise in alcohol duty until August 1, writes Daniel Woolfson.
He added the government would "increase the generosity" of tax relief for draught beer from August 1.
This means the tax paid on draught beer will be 11p lower than duty paid by supermarkets, he claimed.
He added this was part of a "Brexit pubs guarantee" and would not have been possible while Britain was in the EU.
Due to the Windsor Framework, this will be extended to pubs in Northern Ireland, he said.
Britain will build a new supercomputer in an effort to catch up in the global AI race, the Chancellor has said.
Mr Hunt promised £900m to fulfil the recommendations of the Government's Future of Compute review, in which top scientists called for the construction of a new "exascale computer" to keep up with the US and China.
There have been concerns that Britain is falling behind as demands for vast amounts of computing capacity continue to accelerate.
Britain will put in place a new approval process for groundbreaking medicines to allow for the "quickest, simplest" route for pharmaceutical companies seeking rapid access to NHS patients, writes Hannah Boland.
Jeremy Hunt said he would be providing £10m of taxpayer funding to put in place the new process, which would result in a "rapid, near-automatic sign-off for medicines and technology" that had already been approved in countries such as the US, Japan and elsewhere in Europe from 2024.
The Chancellor said this would "speed up access for NHS patients to the very newest drugs".
The Chancellor has set out his plans to encourage private sector investment. He said:
Firstly, following representations from our energetic Energy Security Secretary I am announcing the launch of Great British Nuclear which will bring down costs and provide opportunities across the nuclear supply chain to help provide up to one quarter of our electricity by 2050.
And secondly, I am launching the first competition for Small Modular Reactors. It will be completed by the end of this year and if demonstrated to be viable we will co-fund this exciting new technology.
Finally under the ‘e’ of Enterprise I come to our innovation economy, a central area of national competitive advantage for the United Kingdom.
Over the weekend, I worked night and day with the Prime Minister and the Governor of the Bank of England to protect the deposits of thousands of our most cutting-edge companies.
We successfully secured the sale of the UK arm of Silicon Valley Bank to HSBC, so the future of those companies is now safe in the hands of one of Europe’s biggest and most creditworthy banks.
But those events show that we need to build a larger, more diverse financing system, where the benefits of investment in high growth firms are available to more investors.
So I will return in the Autumn Statement with a plan to deliver that. It will include measures to unlock productive investment from defined contribution pension funds and other sources, make the London Stock Exchange a more attractive place to list, and complete our response to the challenges created by the US Inflation Reduction Act.
Projects to capture carbon dioxide emissions and stash them underground are set to get financial support worth up to £20bn over several years, writes Rachel Millard.
The Government wants 20-30 million tonnes of carbon dioxide to be stored and captured by 2030 to help meet net zero goals.
Developers are expected to be supported by contracts with the government guaranteeing their revenues, backed by levies on consumer bills.
Jeremy Hunt said the emerging industry would support up to 50,000 jobs.
The Chancellor has announced a partial walkback on measures to slash R&D tax credits for small businesses, writes Matthew Field.
In the Autumn statement, Mr Hunt curtailed a scheme that allowed start-ups to claim back taxes from their research spending. The move led to fury from the tech sector amid concerns it would reduce investment.
Now businesses in the most high tech sectors, that invest up to 40pc of their spending in R&D, will continue to receive an enhanced tax credit. The credit will be worth an extra £27 for every £100 spent, Mr Hunt said.
He said: "It is a £1.8bn package of support helping 20,000 cutting edge companies turning Britain into a science superpower."
A three-year policy of “full expensing” for businesses will mean every pound a company invests in IT equipment, plant or machinery can be deducted “in full and immediately” from taxable profits, a move worth £9 billion a year, the Chancellor said.
Mr Hunt will also boost mayors' financial autonomy by agreeing multi-year single settlements for the West Midlands and the Greater Combined Manchester Authority at the next spending review, something "I intend to roll out for all Mayoral areas over time".
He added: "I have also agreed a new long-term commitment that they can retain 100pc of their business rates, something I also hope to expand to other areas over time."
For Scotland, Wales and Northern Ireland this Budget delivers not only a new Investment Zone but an additional £320m for the Scottish Government, £180m for the Welsh Government and £130m for the Northern Ireland Executive as a result of Barnett consequentials.
Mr Hunt said:
On top of which in Scotland, I can announce up to £8.6m of targeted funding for the Edinburgh Festivals as well as £1.5m funding to repair the Cloddach Bridge.
I will provide £20m of funding for the Welsh Government to restore the Holyhead Breakwater and, in Northern Ireland, I am allocating up to £3m to extend the Tackling Paramilitarism Programme and up to £40m to extend further and higher education participation.
Each area identified by the Government must now identify a location for an where they can "offer a bold and imaginative partnership" for a new investment zone.
This must show a partnership "between local government and a university or research institute in a way that catalyses new innovation clusters". Mr Hunt said:
If the application is successful, they will have access to £80m of support for a range of interventions including skills, infrastructure, tax reliefs and business rates retention.
Working together with our formidable Levelling Up Secretary, I also want to give some further support to levelling up areas under the ‘E’ of everywhere.
First, I will invest over £200m in high quality local regeneration projects across England including the regeneration of Tipton town centre and the Marsden New Mills Redevelopment Scheme.
I am also announcing a further £161m for regeneration projects in Mayoral Combined Authorities and the Greater London Authority.
Jeremy Hunt hailed the examples of Canary Wharf and Liverpool Docks as two outstanding regeneration projects that happened under a previous Conservative government.
He said: "I pay tribute to Lord Heseltine for making them happen because they transformed the lives of thousands of people.
"They showed what’s possible when entrepreneurs, government and local communities come together. So today I announce that we will deliver 12 new Investment Zones, 12 potential Canary Wharfs."
He said in England the Government has identified the following areas as having the potential to host one: West Midlands, Greater Manchester, the North-East, South Yorkshire, West Yorkshire, East Midlands, Teesside and Liverpool.
He said: "There will also be at least one in each of Scotland, Wales and Northern Ireland."
The Chancellor has said freezing fuel duty, the duty on beer and keeping the energy cap at £2,500 in place for another three months will help bring down inflation, writes Eir Nolsøe.
The measures will knock off around 0.75 percentage points off consumer price growth, Mr Hunt said.
"Our energy price guarantee, fuel duty and duty on a pint all frozen in today’s budget. That doesn't just help families. It heps the economy too"
Mr Hunt said that return to growth "has direct consequences for our role on the global stage". He said:
I am proud we are giving the brave people of Ukraine more military support than anyone else in Europe.
On Monday we were able to go further with my RHF the Prime Minister announcing a £5bn package of funding for the Ministry of Defence, an additional £2bn next year and £3bn the year after.
Today, following representations from our persuasive Defence Secretary, I confirm that we will add a total of £11bn to our defence budget over the next five years and it will be nearly 2.25pc of GDP by 2025.
We were the first large European country to commit to 2pc of GDP for defence and will raise that to 2.5pc as soon as fiscal and economic circumstances allow.
In November, the OBR expected that the UK economy would enter recession in 2022 and contract by 1.4pc in 2023.
Today, the OBR forecast we will not enter a recession at all this year with a contraction of just 0.2pc.
After this year the UK economy will grow in every single year of the forecast period: by 1.8pc in 2024; 2.5pc in 2025; 2.1pc in 2026; and 1.9pc in 2027.
They also expect the unemployment rate to rise by less than one percentage point to 4.4pc, with 170,000 fewer people out of work compared to their Autumn forecast.
On to one of the Prime Minister's favourite parts of the economy.
Chancellor Jeremy Hunt said:
We have built the largest life sciences sector in Europe, producing a Covid vaccine that saved six million lives and a treatment that saved a million more.
Our film and TV industry has become Europe's largest, with our creative industries growing at twice the rate of the economy.
Our advanced manufacturing industries produce around half the world's large civil aircraft wings. And thanks to a clean energy miracle we have become a world leader in offshore wind.
Mr Hunt added:
Even better in the final two years of the forecast our current budget is in surplus, meaning we only borrow for investment and not for day-to-day spending.
Day to day departmental spending will grow at 1pc a year on average in real terms after 2024-25 until the end of the forecast period, and capital plans are maintained at the same level set at Autumn Statement.
More on one of the Chancellor's priorities.
In the Autumn Statement, he announced public sector net borrowing must be below 3pc of GDP over the same period.
The OBR has confirmed the Government is meeting that rule with a buffer of £39.2bn.
Mr Hunt said: "In fact our deficit falls in every single year of the forecast, with borrowing falling from 5.1pc of GDP in 2023-24, to 3.2pc in 2024-25, 2.8pc in 2025-26, 2.2pc in 2026-27 and 1.7pc in 2027-28.
Underlying debt is forecast to be 92.4pc of GDP next year, 93.7pc in 2024-25; 94.6pc in 2025-26, and 94.8pc in 2026-27, before falling to 94.6pc in 2027-28.
Mr Hunt said:
With a buffer of £6.5bn, it means we are meeting our fiscal rule to have debt falling as a percentage of GDP by the fifth year of the forecast.
As a proportion of GDP our debt remains lower than the USA, Canada, France, Italy and Japan.
And because of the decisions I take today, and the improved outlook for the public finances, underlying debt in five years’ time is now forecast to be nearly three percentage points lower than it was in the Autumn.
That means more money for our public services and a lower burden on future generations – deeply-held Conservative values which we put into practice today.
Ofgem has already agreed with suppliers a temporary suspension to forced installations of prepayment meters, installed in four million households.
Mr Hunt has confirmed the Government "will bring their charges in line with comparable direct debit charges".
He said: "Under a Conservative government, the energy premium paid by our poorest households is coming to an end."
The OBR report today that inflation in the UK will fall from 10.7pc in the final quarter of last year to 2.9pc by the end of 2023.
Mr Hunt said:
That is more than halving inflation.
High inflation is the root cause of the strikes we have seen in recent months.
We will continue to work hard to settle these disputes but only in a way that does not fuel inflation.
Part of the fall in inflation predicted by the OBR happens because of additional measures I take today.
Jeremy Hunt has confirmed the Energy Price Guarantee will remain at £3,000. He said:
Today, we deliver the next part of our plan. A budget for growth. Not just the growth that comes when you emerge from a downturn.
But long term, sustainable, healthy growth that pays for our NHS and schools, finds jobs for young people, and provides a safety net for older people all whilst making our country one of the most prosperous in the world.
Prosperity with a purpose. That’s why growth is one of the Prime Minister’s five priorities for our country.
I deliver that today … …by removing obstacles that stop businesses investing; …by tackling labour shortages that stop them recruiting; …by breaking down barriers that stop people working; …and by harnessing British ingenuity to make us a science and technology superpower.
Mr Hunt said:
But we remain vigilant, and will not hesitate to take whatever steps are necessary for economic stability.
Today the Office for Budget Responsibility forecast that because of changing international factors and the measures I take, the UK will not now enter a technical recession this year.
They forecast we will meet the Prime Minister’s priorities to halve inflation, reduce debt and get the economy growing. We are following the plan and the plan is working. But that’s not all we’ve done.
But long term, sustainable, healthy growth that pays for our NHS and schools, finds jobs for young people, and provides a safety net for older people all whilst making our country one of the most prosperous in the world.
Prosperity with a purpose. That’s why growth is one of the Prime Minister’s five priorities for our country.
Jeremy Hunt said "in the face of enormous challenges I report today on a British economy which is proving the doubters wrong".
In the autumn we took difficult decisions to deliver stability and sound money.
Since mid-October, 10-year gilt rates have fallen, debt servicing costs are down, mortgage rates are lower and inflation has peaked.
The International Monetary Fund says our approach means the UK economy is on the right track.
The Chancellor is about to begin his speech. Follow it all here.
The Government will reportedly announce a raft of environmental policies by the end of March in response to Joe Biden's massive package of green subsidies.
The plan has internally been titled "Green Day" and will include measures to protect jobs in British industries such as electric vehicle production, according to Bloomberg.
These sectors may come under threat from the US Inflation Reduction Act the EU’s Green Industrial Plan.
The program is not likely to rival the US or EU packages in terms of subsidies, but will include measures to address risks to British jobs and implement a plan for green growth.
Officials at the Treasury and the new Department for Energy and Net Zero, led by Grant Shapps, are working on the policy.
Neither department immediately responded to a request for comment.
Jeremy Hunt delivered his Autumn Statement in the wake of a pensions market crisis caused by the ill-fated mini-Budget of Liz Truss's government.
Today, he will deliver his first Budget against a backdrop of a huge stock market selloff.
The FTSE 100 has slumped to its lowest levels this year as banking shares plunged amid resurging fears over the health of the global financial system.
The blue-chip index was trading about 2.5pc lower, dragged down by banking and insurance stocks which had only briefly managed to recover after the monumental collapse of Silicon Valley Bank.
Banks are down 5pc across the FTSE 350 after the biggest shareholder in Credit Suisse said it would not inject any more cash into the embattled lender.
Its shares have fallen 22pc today.
Prime Minister's Questions is underway, with the Budget due to be delivered by Jeremy Hunt at about 12.30pm.
Rishi Sunak told Cabinet colleagues that the Budget would deliver on three of his administration's five priorities.
According to a Cabinet readout, issued before the Chancellor gets to his feet in the Commons, Mr Sunak "said it was no mistake that three of the Government's five priorities were focused on the economy.
"He said the Budget will deliver on all three, with a particular focus on growth. He also thanked the Chancellor and the Treasury team for their swift work in securing the sale of the UK arm of the Silicon Valley Bank to HSBC."
The readout said that Mr Hunt, setting out his Budget measures, thanked colleagues "for their support over recent weeks".
"He set out the improved economic picture following his autumn statement, explaining it paved the way for this Growth Budget."
"He referenced plans for deregulation with Brexit freedoms, plans to invest billions in carbon capture and storage and develop nuclear energy, a boost to levelling up through 12 investment zones across the UK and a significant package to help people get into work, ranging from support for the over 50s, those on benefits, parents, and those with long-term health conditions."
Stock markets have sunk as concerns deepened over the banking sector as Credit Suisse's largest shareholder ruled out injecting more cash into the embattled lender.
Both the FTSE 100 and the FTSE 250 have each fallen 2.5pc today after an extended period of volatility triggered by the collapse of Silicon Valley Bank.
Credit Suisse's shares slumped another 20pc to a new record low, having fallen 29pc over the last three sessions.
Ammar Al Khudairy, chairman of the Saudi National Bank (SNB), said his company will not invest any more capital into Credit Suisse, with bets that scandal-hit lenders would default on its loans hitting a record high.
Asked whether SNB was open to further injections of cash into Credit Suisse if there was another call for more liquidity, he said: "The answer is absolutely not, for many reasons outside the simplest reason which is regulatory and statutory."
British lenders have taken the brunt of the selloff in the UK, with banking stocks across the FTSE 350 falling 4.4pc this morning and 11pc over the last four days of trading.
The fall across the markets also comes as Jeremy Hunt is likely to confirm that corporation tax will rise from 19pc to 25pc when he delivers his fiscal statement in the Commons this afternoon.
There has been also a cooling of optimism that the US Federal Reserve will tone down its rate-hiking spree next week in the aftermath of Silicon Valley Bank's collapse.
Russ Mould, investment director at AJ Bell, said:
It doesn't feel as if Silicon Valley Bank at the moment is deflecting central banks, or at least the Fed from it's designed to keep pressing hard against inflation.
Some of that early-year optimism (that) we would get a cooling in inflation .. (and) that we get a pivot in rates … might not come to pass.
Shares of other European banks are also taking a hit from the selloff surrounding Credit Suisse.
BNP Paribas, Societe Generale and Commerzbank have all fallen about 10pc.
In Britain, Barcalys has fallen 7.1pc while NatWest is down 4.9pc. HSBC has slumped 4.4pc.
Credit Suisse remains down 19.4pc after its biggest shareholder, Saudi National Bank, ruled out injecting any more cash into the embattled bank today.
not now, CS https://t.co/4Nc3i17dKH
The boss of the world's largest asset manager has warned that the banking crisis could worsen beyond the failure of Silicon Valley Bank.
BlackRock chief executive Larry Fink said in his annual letter to shareholders that "it's too early to know how widespread the damage is" following the failures in the US that have also included Silvergate and Signature Banks.
Referring to the US Federal Reserve's aggressive rises in interest rates over the last year, he warned that "prior tightening cycles have often led to spectacular financial flameouts". He said:
We don't know yet whether the consequences of easy money and regulatory changes will cascade throughout the US regional banking sector (akin to the savings & loan crisis) with more seizures and shutdowns coming.
It does seem inevitable that some banks will now need to pull back on lending to shore up their balance sheets, and we're likely to see stricter capital standards for banks.
Nurseries have warned that there will not be enough places for children if the Government expands free childcare in England.
Education editor Louisa Clarence-Smith has been speaking to providers this morning:
Jeremy Hunt is expected to announce that parents of children aged one and two will be able to access 30 hours a week of free care, under a policy estimated to cost £4bn.
However, Neil Leitch, chief executive of the Early Years Alliance, said: "As it currently stands, I think we have a massive challenge on our hands. If you talk to parents, they are saying they are struggling to get places for their three and four year olds, never mind one and two year olds."
He said that nearly 5,500 pre-school care providers have closed their doors in the last 12 months and the sector has a workforce shortage.
"The workforce are leaving in droves, having to reduce opening hours because the system is so inadequately funded," he added. "I don't think there are too many providers wanting to expand."
Ann Miller, director of Sure Steps Nursery in Liverpool, told BBC Breakfast: "There will not be enough places. It's a fact. Because currently, I'm turning people away."
She said that many other operators "have exactly the same concerns", adding: "You are going to drive the demand for places and the places aren’t going to be there, because you haven’t supported the sector for many many years."
The pound has fallen against the dollar but remained close to a one-month high, ahead of Jeremy Hunt's Budget.
Mr Hunt is set to detail plans to try to speed up growth after the shocks of the pandemic and double-digit inflation. However, he has already ruled out a major spending spree or large-scale tax cuts.
Therefore, analysts are not expecting a repeat of last September's volatility when then former chancellor Kwasi Kwarteng announced uncosted spending plans, sending the pound to a record low against the dollar of $1.0327.
Today, the pound ha fallen 0.7pc to below $1.20, having hit a one-month high of $1.2203 on Tuesday.
However, it has gained 0.3pc against the euro to be worth 88p.
Geolocation technology company TomTom said at 7am the average time it took to drive 10km (6.2 miles) in London was two minutes longer than what is usual at that time, at 15 minutes and 27 seconds.
There were 387 traffic jams in the capital stretching for a total of 406km (252.3 miles).
The increase in congestion comes as the London Underground network is closed due to a drivers' strike.
As you may have noticed from your difficult journey to work, or the fact you have children hanging around at home, hundreds of thousands of workers are staging strike action on Budget Day.
Members of several trade unions have walked out, mounting hundreds of picket lines across the country amid continuing anger over issues including pay, jobs, pensions and conditions.
Those striking today include teachers, university lecturers, civil servants, junior doctors, London Underground drivers and BBC journalists.
Despite talks being held between unions and the Westminster Government, the public sector strikes remain deadlocked.
Some of the strikes, such as those by teachers, will only be held in England as progress has been made in Wales and Scotland.
Public and Commercial Services union general secretary Mark Serwotka warned the action is just the start of strikes that could last until the end of the year. He said:
On Budget Day we're asking Chancellor Jeremy Hunt to give our hard-working members a fair pay rise.
We've been given a 2pc pay rise when food inflation was 16pc last week. 40,000 civil servants use food banks and 45,000 claim in-work benefits because they're so poor.
Liberal Democrat Treasury spokeswoman Sarah Olney said the extension of the current energy price guarantee "does not go far enough". She said:
Instead of a sticking plaster for another three months, we need meaningful action now.
The Liberal Democrats are calling on the Chancellor to cut energy bills by £500 per household. This would make a significant difference to households and the Government can afford to do it, they are choosing not to.
In three months' time families will once again be facing a cliff edge of unaffordable heating bills.
SNP economy spokesman Stewart Hosie said: "It's truly pathetic that the Chancellor has failed to cut energy bills, despite having ample resources to do so.
"The Tories are ripping families off by keeping bills at such exorbitantly sky-high levels, with many families forced to pay three times what they paid a year ago."
Credit Suisse’s shares slumped another 10pc to a new record low after its top shareholder ruled out providing more financial assistance to the struggling Swiss bank.
Saudi National Bank chairman Ammar Al Khudairy said it would "absolutely not" provide more support if there was another call for additional liquidity in the institution.
Saudi National Bank, which is 37pc owned by the kingdom's sovereign wealth fund, became Credit Suisse's biggest shareholder late last year after acquiring a 9.9pc stake in the Swiss lender.
His comments to Bloomberg TV saw its shares plummet further in the wake of the crisis in confidence in the banking sector following the collapse of Silicon Valley Bank.
It is down more than 27pc in the last month and 18pc in the last three days alone.
Credit Suisse plunges to fresh All-Time low as Saudi National Bank rules out assistance. Now down 96.7% below ATH. pic.twitter.com/33KDigAlDc
Businesses will be looking keenly at OBR when Jeremy Hunt delivers his Budget today, a top economist has said in a thinly-veiled swipe at Liz Truss' disastrous mini-Budget.
Kitty Ussher, chief economist at the Institute of Directors, said the question for firms was "whether today's Budget announcements are enough to make a difference" to economic growth.
The former Labour minister took aim at the ill-fated mini-Budget delivered by Kwasi Kwarteng in September which was delivered without forecasts from the OBR.
It eventually caused a crisis in the pensions market and led to the downfall of the Truss government. Ms Ussher said:
Business and government both want to see stronger economic growth.
The question will be whether today's Budget announcements are enough to make a difference.
To answer that, we'll be looking to see if the OBR has upgraded its economic growth forecasts for Britain directly as a result of the measures announced at the Budget.
After all, they get advance notice of policy changes precisely in order to make that assessment.
Zara owner Inditex has revealed record earnings as shoppers flooded back to stores despite the rising cost of living.
The world's largest fashion group revealed that earnings increased by a fifth to €8.6bn (£7.6bn) in 2022 compared with the previous year.
The group, which also owns the Pull & Bear and Bershka brands, said it benefited from a bounce-back in store sales following the pandemic and efforts to reduce costs.
Sales increased by 17.5pc to €32.6bn (£28.8bn) for the year, it added, amid 23pc growth from shoppers at its high street stores.
Inditex told shareholders that online traffic and store sales grew "markedly" during 2022 and has continued to increase in the following months.
Store and online sales rose by 13.5pc over the period between February 1 and March 13, compared with a year earlier, as it said its spring/summer collections were "well received" by shoppers.
Mike Foster, chief executive of the Energy and Utilities Alliance, said:
We warmly welcome the decision to extend the Energy Price Guarantee, helping to protect consumers against a 20pc increase from April.
It's good that the Chancellor has listened to us in the energy industry as well as consumer champions who have all backed this move.
What we now need is the Chancellor to listen to industry again, by supporting the move towards a hydrogen economy, in the first instance by giving the green light to blending this zero carbon gas with natural gas into our networks.
This helps us all decarbonise without spending huge sums ripping out our gas boilers.
Purplebricks has confirmed it is in talks with Strike a month after the online estate agent put itself up for sale.
The company said Strike is not formally taking part in the sale process and that there is no guarantee it will make an offer.
Purplebricks is exploring a break-up of the business after warniong on profits and launching a fresh round of job cuts in February.
Online estate agent Strike has until April 12 to announce whether it intends to make an offer.
John Lewis has created a new chief executive position to take on some of the responsibilities of its chairman Dame Sharon White, two weeks after Pippa Wicks suddenly departed as the head of John Lewis's department stores.
Former Hovis chief executive Nish Kankiwala will take on the role from March 27, having been a non-executive director of the John Lewis Partnership since April 2021.
He has also held senior roles at Burger King and PepsiCo. Ms White said:
I'm delighted that Nish is to be chief executive. Since joining the board in 2021, Nish has developed a deep understanding and appreciation of the partnership model and has provided counsel on our transformation.
He will be able to supercharge this in his new role while protecting the partnership's ethos.
Nish and I will work closely to ensure the partnership thrives for another century.
The new structure allows me to focus on the preservation of the Partnership model and our distinctive character, on the strategy for the partnership and our big commercial choices.
Nish will draw on his significant transformation experience to drive performance and profitability day to day.
H&M, the world's second-biggest fashion retailer, has reported a smaller-than-expected increase in sales over the period December to February, in the latest sign it is struggling to compete with Zara-owner Inditex.
Shares in H&M were down 6pc in early trading, underperforming the wider Swedish market. They are still up 12pc so far this year.
The Swedish group said sales measured in local currencies for the period, its fiscal first quarter, rose 3pc from a year earlier.
Analysts at Jefferies said local-currency sales, the figures most watched by markets, were significantly lighter than consensus estimates and implied that sales in reality fell 3% in February.
H&M said net sales were up 12pc from a year earlier to 54.9 billion krona (£4.3bn).
Excluding Belarus, Russia and Ukraine, the rise in net sales was 16pc, and, in local currencies, 7pc, the company said in a statement.
Budget player H&M's profits fell last year as it did not fully pass on soaring raw material, freight and energy costs in an attempt to retain its price-sensitive customers.
Insurer Prudential has sunk to the bottom of the FTSE 100 after revealing some exposure to Silicon Valley Bank.
The blue-chip index lost 0.5pc, trading in the red after jumping more than 1pc on Tuesday.
Prudential fell 4.3pc despite the Asia-focused insurer reported an 8pc jump in full-year year profit.
The company's chief financial officer James Turner also said the insurer had a $1m exposure to Silicon Valley Bank which was "minimal" against a total debt book of $23bn.
Lower gold prices weighed on precious metal miners, taking the index down 1.4pc.
The more domestically-focussed FTSE 250 midcap index also lost 0.4pc.
Online rail ticketing business Trainline has revealed that rail strikes left it nursing a sales hit of up to £6m a day and means annual sales growth has fallen short of expectations.
The group said ongoing industrial action on UK railways cost it £5m to £6m in gross sales impact on average per strike day.
It said overall group net ticket sales jumped 72pc to £4.3 billion in the year to February 28 as travel recovered from the pandemic.
But on a three-year comparison with pre-Covid levels, growth was 16pc, slightly behind the group's expectations for between 18pc and 27pc, "primarily given the impact of industrial action in the UK", according to Trainline.
Rail union members across 14 train operators will go on strike tomorrow and on Saturday in their long-running dispute over pay.
Tube drivers are on strike today in a separate dispute over pay.
Jeremy Hunt should resist the urge to cut corporation tax in the Budget to create a more "stable environment" that avoids going "back and forth," according to the chairman of NatWest.
Howard Davies said there was a risk of displaying a "lack of credibility" by changing the policy again.
Corporation tax is forecast to rise from 19pc to 25pc in April for businesses with profits of more than £250,000.
Mr Davies told BBC Radio 4:
One thing that influences businesses a lot is uncertainty and going back and forth.
We have gone back and forth on corporation tax rates several times in recent years and I think that even if the Chancellor were to say 'I'm postponing this rise' there would be a lack of credibility and once again people would worry about the future and think that if taxes are going to be so much lower then interest rates are going to be higher.
So I don't think that you would get a great boost from doing that.
Some predictability after, let's face it, only six months from complete turmoil and people are really looking for a stable environment in which to make business decisions.
The Chancellor has made much of his ambition to make Britain a tech superpower but he ignores hospitality at his peril, according to a brewery boss.
Andy Wood, chief executive of Adnams, told BBC Radio 4's Today programme:
There are new and sexy sectors and they are no doubt important – AI, machine learning, advanced manufacturing, life and bio sciences.
These are great but they need-long term industrial strategy.
Give hospitality a nudge and it responds instantly. This is a sector that is omnipresent.
I think the Government ignore it at their peril.
He also called on the Government to improve infrastructure and to fix the strikes which cost hospitality £1.5bn in December in what was its "golden quarter".
It has been a mixed start on the markets ahead of the Budget.
The FTSE 100 has fallen 0.4pc after the open to 7,607.83 while the domestically-focused FTSE 250 has jumped 1.3pc to 19,076.63.
Asian equities rose overnight, tracking a relief rally on Wall Street after US inflation data delivered no nasty surprises following the turmoil sparked by Silicon Valley Bank's collapse.
Insurance giant Prudential has reported a rise in annual underlying earnings and said 2023 had "started well" as the removal of China's Covid restrictions have helped boost sales.
The group, which has headquarters in London and Hong Kong and is focused on the Asia and African markets, reported underlying operating profit up 8pc on a constant currency basis to $3.4bn (£2.8bn) for 2022.
New business profit fell 11pc on a constant currency basis to $2.2bn (£1.8bn).
It saw sales lift 9pc, but said revenue growth had surged to 15pc in the first two months of 2023 thanks to China's reopening.
Prudential's new chief executive Anil Wadhwani, who replaced Mark FitzPatrick in the top job last month, said:
The removal of the bulk of Covid-19-related restrictions across the region and the progressive opening up of the Chinese Mainland economy has meant that 2023 has started well with encouraging progress in year-on-year sales, with group-wide APE sales for the two months ended February 2023 up 15pc over the prior year.
In Hong Kong we have seen a gradual increase in cross-border traffic from the Chinese Mainland as travel restrictions are eased.
Demand for savings products across the Hong Kong business is driving the increase in APE sales in the first two months of 2023.
Jeremy Hunt's "Budget for growth" aims to get more people back into the labour market.
A key policy to help the Chancellor achieve that goal is his expected expansion of free childcare to cover one and two-year-olds in England.
It will be a welcome boost after a poll by accountancy Kreston Reeves found half of respondents thought under-30s needed the most help in the Budget.
Tax partner Laurence Parry said:
The Government has found various pots of cash to help homeowners with energy costs and its triple-lock commitment on state pensions.
But it has done very little to help those starting and building their careers.
He suggested a tax break for entrepreneurial under 30s and a cap on interest rates charged on student loans, which stands at 9pc.
Jeremy Hunt will claim he has launched a "Budget for growth" when he stands up in front of MPs today.
The Chancellor will insist his measures will be "harnessing British ingenuity to make us a science and tech superpower".
In January, Mr Hunt hailed Britain's life sciences sector, the largest in Europe, saying he wanted entrepreneurs in the industry "to come to the UK because it offers the best possible place to make their visions happen".
Mayer Schreiber, chief executive of Discovery Park, the 220-acre science and innovation park in Kent, said his sector is "crying out for new laboratories and office space". He said:
For the UK to be a global powerhouse for science and technology, our brightest brains need the best possible places to work.
High-performing lab space is incredibly expensive to bring to the market.
The Government has supported many schemes, including an incubator here at Discovery Park, but if we want a pipeline of space for start-up to scale-ups and beyond, we need additional business rate relief during refurbishment.
In addition, there's a need for national tax breaks for new commercial properties to unlock our nation’s full scientific potential.
As if the drama of Budget Day was not enough, no trains are running on any London Underground lines today, according to Transport for London's website.
This is due to a strike by drivers in Aslef and the Rail, Maritime and Transport union (RMT).
The Docklands Light Railway and Elizabeth line are part-suspended because of the industrial action.
Jeremy Hunt will use the Budget to announce an expansion of free childcare to cover one and two-year-olds in England.
Business leaders have said the Chancellor must find ways to help female business founders grow their companies as they are too often held back by crippling childcare costs.
Ahead of today's Budget, Small Business Britain founder Michelle Ovens, said:
We need to see policies around childcare and disability that may be brought to get the labour market moving, extended to engage the barriers to entrepreneurship too.
Entrepreneurs face crippling childcare costs that hamper their ability to grow, which particularly impacts female founders.
We urgently need action to tackle this crisis.
Equally, disabled founders need to keep access to benefits, and additional targeted relevant support, whilst they start up and grow, rather than face the perilous cliff edge of losing all income, which for some would be life threatening.
Deputy political editor Daniel Martin has the details on Mr Hunt's announcement today.
Jeremy Hunt must ensure his Budget clears the way for a "decade of delivery" on energy supply in the face of Joe Biden's huge green subsidies, an energy boss has warned.
SSE chief executive Alistair Phillips-Davies welcomed the expected announcement from the Chancellor of a £20bn investment in technology to reduce Britain’s carbon emissions in the Budget.
However, he warned it was time to shift from big targets to action.
It comes after Joe Biden last year announced $369bn in green subsidies over the next decade to lure companies to invest in the US.
He told BBC Radio 4's Today programme:
I think we’ve had very clear policy from Government in terms of big targets and in terms of British energy security strategy but now we are into delivery mode.
This has got to be a decade of delivery.
Typical household bills will be held at £2,500 a year for another three months, the Treasury has confirmed.
The Energy Price Guarantee will no longer rise as expected to £3,000 from April, as had been planned, but will remain at its present level for a further three months until June.
It means households will not feel the full force of Ofgem's price cap between April and June – which will become £3,280 – helping to bridge consumers into the summer, when energy bills are expected to fall to around £2,100.
Households faced a £500 average annual rise from April as the Government had planned to raise its guarantee to £3,000.
Instead the Government estimates holding the scheme at the same level for another three months will save a typical household £160.
Prime Minister Rishi Sunak said: "We know people are worried about their bills rising in April, so to give people some peace of mind, we're keeping the Energy Price Guarantee at its current level until the summer when gas prices are expected to fall.
"Continuing to hold down energy bills is part of our plan to help hardworking families with the cost of living and halve inflation this year.
Chancellor Jeremy Hunt said: "High energy bills are one of the biggest worries for families, which is why we're maintaining the Energy Price Guarantee at its current level.
"With energy bills set to fall from July onwards, this temporary change will bridge the gap and ease the pressure on families, while also helping to lower inflation too."
The Government estimates that holding its Energy Price Guarantee at £2,500 for another three months will save the typical household a total of £160.
The scheme has already cut the typical family energy bill by over £1,300 since October.
Under the Ofgem price cap, the average household energy bill would have hit £4,279 a year this winter.
The cap was due to fall to £3,280 from April but households faced a £500 average annual rise as the Government had planned to raise its guarantee to £3,000.
Lower wholesale gas prices are expected to feed through to lower household energy bills from July.
Cornwall Insight data suggests the Ofgem price cap will reach an estimated £2,100 a year for a typical household.
Household energy bills will remain at £2,500 a year on average from April after the Government extended its Energy Price Guarantee.
The scheme had been due to rise to £3,000 from April, lifting household bills by £500.
The guarantee will be held at £2,500 until June, at which point bills are forecast to fall below that level under the Ofgem price cap anyway.
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Asian equities rose sharply on Wednesday, tracking a relief rally on Wall Street and as US inflation data delivered no nasty surprises, reinforcing hopes the Federal Reserve will likely go for a smaller rate hike when it meets next week.
MSCI's broadest index of Asia-Pacific shares outside Japan was 1.44pc higher, having dropped 1.7pc on Tuesday after SVB's collapse triggered heavy selling by investors in the last few trading sessions.
Australia's S&P/ASX 200 index climbed 0.33pc in early trading, while Japan's Nikkei was mostly flat.
Chinese shares were 0.46pc higher and Hong Kong's Hang Seng index gained 1.4pc.
Wall Street stocks closed higher as jitters over contagion in the banking sector eased and investors absorbed new inflation data showing US price increases cooled in February.
The Dow Jones Industrial Average closed 1.1pc higher at 32,155.40.
The broad-based S&P climbed 1.7pc to close at 3,920.56, after regional banking stocks recovered some of the ground lost during last week's collapse of Silicon Valley Bank.
The tech-heavy Nasdaq Composite finished up 2.1pc at 11,428.15 following a late rally.
US government bonds stabilised and reversed much of Monday's collapse in yields, with traders resuming bets that the Federal Reserve will increase interest rates next week.
The yield on the two-year Treasury, which is more sensitive to interest rates, recovered to around 4pc after suffering the deepest three-day plunge since the Black Monday in 1987. The benchmark 10-year Treasury yield climbed up to 3.69pc.