Schroders European economist Azad Zangana believes the measures proposed by Chancellor Alistair Darling in the Pre-Budget Report will do little to bring public finances back under control.
As expected, the Chancellor raised his public borrowing forecast by £5bn over the current and next three financial years, taking total borrowing to a £611bn. Zangana describes Darling's attempts to offset the rising debt burden as simply "populist measures". "From an economic perspective, today's measures are fairly neutral," Zangana says. "More support for lower income families may help boost consumption at the margin, but the re-instatement of VAT at 17.5%, and the new 50% top rate of tax are likely to offset most of the gains." Overall, Schroders believes the Chancellor's for...
To continue reading this article...
Join Professional Adviser for free
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes