Autumn Statement: Industry Experts React
In light of the announcements made by Chancellor Jeremy Hunt during the government’s Autumn statement, here are some reactive comments from industry experts.
Chieu Cao, CEO of Mintago, said: “After the chaos and economic fallout that occurred after the governments last fiscal policy announcement, Jeremy Hunt’s first Autumn Statement as Chancellor was always going to have a significant impact on the financial wellbeing of hundreds-of-thousands of people across the UK. However, the measures announced today – from tax rises to spending cuts – are unlikely to induce any kind of confidence among Britons who are worried about their short and long-term financial wellbeing. “Already this week, we have seen reports that suggest that 9 in 10 retirees are considering returning to work. Clearly, peoples’ long-term financial security is not at the level that it should be. Similarly, Mintago’s research has found that 70% of people are worried about their immediate financial situation deteriorating further. With the level of spending cuts announced today, the government is obviously unable to provide the support that many people need; employers, therefore, must step up and question what more they can do to support their staff. “Encouraging employees to engage with their pensions to a greater extent, for example, would certainly contribute to employees’ long-term financial security. Moreover, providing support like financial planning platforms or connecting staff with financial advisers would be some good first steps in achieving this. Indeed, such support could better equip staff to overcome any short-term financial challenges that they might face in the coming months as well.”
Mohsin Rashid, Co-founder of ZIPZERO, said: “Misery for millions – that is the result of this budget. And we must never forget why the price we all must pay is so high. The failed Truss experiment left a burning hole in the UK economy, the size of £30 billion. From irresponsible to unforgiving government, the bitter return to austerity will no doubt double down on hardship across the whole country.
“People are struggling, and they are desperately concerned. Concerned over how they will pay their bills, keep the lights on and put food on the table. This government’s response is unconscionable: unnamed Council tax ‘flexibilities’, disenfranchising residents from their rights to approve large hikes, and stripping down energy support into a skeleton package unfit to carry consumers past the finish line, all while raising personal taxes.
“Has the government forgotten its own mantra? There’s no magic money tree. Asking the country to play Sophie’s Choice over which essential item to sacrifice this week will only promote personal and national decline, in a new age of Victorian misery. While there are no fruitful horticultural solutions out there, consumers should take advantage of all money-saving opportunities at their disposal. In particular, the ongoing fight for the right of consumer data is revolutionising the marketing sector and providing consumers with generous cash rewards through direct-to-consumer marketing platforms”.
Jatin Ondhia, CEO, Shojin, said: “Sunak and Hunt have been caught between a rock and a hard place. The pressure of plugging a £55bn fiscal hole has led to a Dickensian Autumn Statement, which left little room for any rabbits to be pulled out of the hat. While the main focus of these austerity measures is to attempt to patch up the country’s finances without rattling the markets, the giant elephant in the room is that the housing crisis is deepening.
“The affordability, quality and volume of homes is worsening for residents, as the upwards pressure on rent is being exacerbated by rising demand and a dwindling supply of homes. This is a national issue and one that can only be solved by taking decisive action to support housing development and boost the delivery of new homes. With housing representing the highest living cost for most, we cannot afford for this ongoing crisis to be once again swept under the carpet in the face of mounting fiscal pressures.”
Sam Martin, CEO, Peckwater Brands, said: “Prominent voices from the hospitality space have been calling out for direct relief and support ahead of this and every other financial statement, but time and again no special measures are announced to support hospitality businesses. Businesses that have survived the pandemic, lockdowns, staff shortages and supply issues will now have to face the fresh challenges of austerity and downturn. The measures announced today like tax relief and the energy price guarantee will go some way to safeguarding our independent pubs, cafes, restaurants, and bars – though only time will tell if they will be enough.
“We all hope that these measures will be enough to ensure stability and growth in the long term, but even with the intervention that has been announced, I predict a difficult year for hospitality businesses. Consumer spending will be reduced significantly, and supply and staff shortages remain a major challenge for many.
“Hospitality is not just vital in providing jobs and revenue for the economy, it provides an invaluable part of daily life to millions around the country. Every venue saved is a reason to celebrate, but with our research showing that only 59% of pub owners believe their business will still be open in 12 months, we can only hope that the measures announced today will make a difference.”
Paresh Raja, CEO of MFS, said: “With a £55bn fiscal black hole to fill, Hunt’s task today was far from easy. Admittedly, the austerity measures announced in the Autumn Statement will contribute to reducing the deficit. However, the announcement will do little to settle the nerves of those in the buy-to-let sector.
“In the midst of rising interest rates and the aftermath of the mini-budget, buy-to-let landlords are seeing the value of their assets decline, while the cost of borrowing and property maintenance continues to rise. These issues have not been addressed today and are harming the viability of owning a buy-to-let property, which is forcing many landlords to consider selling their properties.
“In fact, according to MFS’ research, 40% of landlords are now planning on selling one or more of their properties in the next 12 months; such an exodus from the market would present an apocalyptic challenge to an extremely competitive private rental sector that is already grappling with rampant demand and a perennial undersupply of homes. Make no mistake, if the Government fails to support buy-to-let landlords in the months to come, such a situation would be catastrophic for renters.”
Giles Coghlan, Chief Market Analyst, HYCM, said: “With tax hikes and public spending cuts leading the agenda, today’s budget marks a stark return to austerity to an extent not seen since the aftermath of the 2008 global financial crisis. To calm the markets, the overarching sentiment of Chancellor Jeremy Hunt’s statement was that the UK now intends to live within its means, without stifling growth.
“Ultimately, there were few surprises – a strict, ‘kitchen sink’ budget had already been priced into the GBP, and bond markets tend to like austerity because it is disinflationary. This is why UK Chancellor Hunt said that the statement delivers a consolidation of £55bn and means inflation and rates end up significantly lower. However, as the statement was released, expectations for next year’s interest rates remained around the 4.5% mark, albeit fractionally lower than prior to the statement.
“As Hunt ushers out the era of Trussonomics, which tried to stimulate the economy too quickly, there is an equal and opposite risk that the Chancellor depresses the economy too quickly, which could cause yet more economic and political upheaval. Hunt tried to deliver a statement that avoided both extremes. On balance, this was as good as it could have been. The GBP sold off initially on the OBR’s projections for GDP to not return to growth until 2024, but the reaction was marginal. The GBP is most likely to be pushed and pulled around now on the latest USD news, as the UK budget was fully priced into the market and pretty much as expected. The UK Chancellor will likely be breathing a sigh of relief now.”