Comment: Spring Statement insights from Anna Macdonald

 

Anna Macdonald, Investment Manager at Aubrey Capital Management, commented:

“My view is that Reeves was hoping to deliver a ‘nothing to see here’ kind of statement, as she has promised to hold just one fiscal event per year now, which will be the budget.

Strong tax revenues and sufficient headroom from the November budget, have meant that borrowing costs had been trending down recently, but given the escalation in the Middle East, yields are ticking up. Energy prices could impact inflation in the coming weeks and months which will limit the opportunities for further rate cuts, which would boost the UK economy.

Unfortunately, we import a lot of gas, so this will weigh on the outlook. If only we had more production from North Sea fields which would at least be bringing in tax revenues!”

Spring Statement Reaction: Businesses Want Clarity, Not Drama

 

Chris Waring, CEO of thisbank says,

“Yes, a quieter Spring Statement is exactly what Britain’s businesses need.

 

They don’t need drama, they need clarity. Confidence is already fragile, and geopolitical tensions and global volatility continue to create instability, with this week only exacerbating this.

 

A quieter Spring Statement doesn’t signal a lack of ambition for the UK economy; it signals control. For banks, it supports sustainable product pricing. For businesses, it enables confident investment decisions. For households, it means fewer sudden shocks and more confidence when managing everyday finances, from savings decisions to longer-term planning.

 

Limiting major fiscal events to once a year reduces the risk of constant market repricing and helps support a steadier interest-rate environment.

 

In an uncertain world, steadiness is strength. Steadiness in fiscal policy is foundational to supporting savers, businesses, and the wider economy.”

 

“Assumptions made as recently as only a few days ago cannot be relied on any longer.”

 

Responding to the Chancellor’s Spring Statement, Katie Horne, savings expert at Flagstone, comments: 

Despite delivering her Spring Statement against a backdrop of extraordinary and rapidly unfolding geopolitical and economic uncertainty, this was a Chancellor who had no time for the soap opera theatrics we’ve become accustomed to with major Treasury announcements.

The Chancellor delivered this statement, determined to herald a return to business-as-usual. We certainly got business-as-usual, and amid all the global turmoil, markets will thank the government for it.

However, whether what the Chancellor is planning and the OBR is forecasting remains the case for long remains to be seen.

After its surprise plummet in February, it was reasonable to imagine that the CPI would continue to fall over the coming months and inflation could return to its coveted 2% spot as early as this Spring. Falls like this would ease pressures on pricing and the general cost of living, and could even spur employers to open up more jobs. Next, we would then need to see unemployment figures fall, particularly among young graduates with decades-long student debts to pay.

All that we can be sure of right now is that the assumptions made as recently as only a few days ago cannot be relied on any longer. 

While it puts undesirable pressure on the cost of living and servicing mortgages, if the base rate doesn’t fall and interest rates subsequently stay higher for longer, this creates opportunities for savers determined to put their hard-earned cash to work. 

With Cash ISA season heading into its final weeks, banks continue to offer competitive rates as the final wave of Cash ISA deposits for this tax year heads their way. Right now, it’s not hard to find standard and tax-free savings accounts alike offering rates at least 50 bps above the base rate and as much as 150 bps above inflation, guaranteeing competitive, protected, inflation-beating returns. Locking in fixed-term rates for portions of your cash might be a shrewd move in the longer term, but for savers who need some cash readily available, instant access and shorter term notice product rates should stay competitive for several weeks yet.

 

Reeves’ inflation forecast unlikely to last


“You have to wonder whether the chancellor has checked a data terminal recently. Today’s note that inflation is falling faster than expected is, like all plans, unlikely to survive first contact with the enemy. UK gas prices are rising at their fastest pace in recent history, and much faster than in 2022. The government might be optimistic, but consumers are already beginning to fret.”

 

Raj Abrol, CEO of Galytix commented:

“The UK economy is at a crossroads, with AI paving the way for unprecedented growth opportunities, but only if the technology is effectively deployed to key industries. The financial services sector has long been hamstrung by overly complex regulations and a genuine fear of risk, particularly when it comes to investing in emerging markets. With the right AI systems in place, these roadblocks can be swiftly removed, with banks and investors able to see the complete picture, enabling them to expand their portfolios and manage risk and investments with confidence.”

Dr Janet Bastiman, chief data scientist, Napier AI, commented:

“With soaring levels of sophisticated fraud and money laundering, AI can play a crucial role in helping banks the police identify rogue operators and bring them to justice. Financial crime is a huge burden for consumers, businesses, and the wider economy, so harnessing the power of AI to tackle this problem should be a top priority.”

 

 

 



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