Darius McDermott: thoughts on the Spring Statement

23 March 2022 – In the Spring Statement today, Rishi Sunak, Chancellor of the Exchequer, gave details on the state of the UK economy and outlined how he would be helping Brits cope with the increase cost of living.

Delivered his latest mini-Budget to the House of Commons today the Chancellor announced cut to fuel duty by 5p a litre and moved to ease the pain of National Insurance hike. But he warned that the global economic outlook is 'challenging' and the government must act 'responsibly'.

Commenting on the Spring Statement, Darius McDermott, managing director of Chelsea Financial Services, said:

"Tackling the rising cost of living seemed to come down to four things: 5p off fuel duty, scrapping VAT on energy saving materials for the home, doubling the household support fund, and the equalisation of national insurance and income tax thresholds in July.

“The latter is probably the most help for most people and some businesses in terms of wages but is three months away and won't make much a dent in the growing bills. If you don't drive or plan to install solar panels, that's about it.

“Public finances are actually in pretty good shape. Borrowing is down this financial year and about 5% of GDP. Yes, the cost of servicing those debts is going up, but if inflation is running at 7.4% this year as the OBR has predicted, a lot of that debt is being inflated away.

“The Chancellor has a decent amount of room for manoeuvre, but has possibly made the political decision to keep some of his power dry for before an election. I think more action could have been taken today.

"There was also talk of exploring ideas around education and training, increasing capital investment, and boosting innovation: 'people, capital and ideas'.

“Any announcement won't be until the Autumn budget, but investors might want to consider investing early in some of these areas - maybe via funds such as IFSL Marlborough Global Innovation (which has a has towards the UK and smaller companies), or VT Gravis Clean Energy Income to pick up on the Chancellor’s comment about ‘looking at our long-term energy security’”.

To view the full statement, click here.