End of a historic period
The UK has been through a historic period of change since our last communication with you. On 8 September 2022, Queen Elizabeth II passed away at Balmoral Castle, Scotland, ending a 70-year reign that made her the country’s longest-serving monarch.
The national period of mourning may be over but, here at NEBA, we would like to pass on our condolences to the Royal Family for their loss and thank Her Majesty for the years of dedication and service to this country.
After weeks of campaigning, the Conservative Party announced it had chosen Liz Truss as its new leader and the UK’s Prime Minister. As she moved into No. 10 Downing Street, Truss faced several issues, including soaring energy prices, which are top of mind for most businesses and households. Read on to find out how her government has set out to tackle the cost of energy and for more on new Chancellor Kwasi Kwarteng’s recent mini-budget.
What was in the mini-Budget?
Tax Cuts
Chief among the new Chancellor’s announcements are energy subsidies and sweeping tax cuts, including the abolition of the top rate of income tax, which will benefit around 1.9% of the UK’s highest earners from April 2023. Whether these will pre-empt economic growth or prove inflationary will largely depend on how these incentives are financed.
Stamp Duty
Kwarteng also delivered a stamp duty cut, meaning first-time buyers who currently pay no stamp duty on the first £300,000, will see that raised to £425,000. Getting rid of stamp duty epitomises Truss’ trickle- down economic plan to kickstart the economy into growth through lower personal taxes.
US Rate Hike
The US Federal Reserve’s decision to hike interest rates by a 0.75 percentage point increase for the third time in a row in September generated huge uncertainty among investors. In response, global equities have fallen, while the yields on US government debt reached a decade high. Despite the central bank’s best efforts, inflation shows no signs of retreating, so expect further volatility.
