Budget 2018.

Today’s Budget wasn’t anything exciting despite its length.  In fact, it was a bit like a cheap prawn cocktail:  a lot of soggy lettuce with only a couple of tiny prawns drooping pathetically on the edge of the glass.

To be fair, Theresa May had made the Chancellor of the Exchequer, Philip Hammond’s life difficult after she declared “austerity is over” during her Conservative party conference speech, especially as she also promised NHS spending would be increased by £20bn a year by 2023 and committed him to freezing fuel duties for the ninth year in a row.

Interestingly, Philip Hammond didn’t confirm the end of austerity, but instead said the era of austerity was “coming to an end” – which given the Brexit uncertainty and fragility of UK economic growth is about as far as he could realistically go.

While this Budget Statement will no doubt grab media headlines, from a stock market standpoint this Budget, like many over the last few years, had little impact on UK equity markets:  while the FTSE-100 ended the day up 86.76 points, or 1.25% at 7,026.32; this was due to news that China may cut taxes on car purchases, coupled with speculation that this month’s sell-off has been overdone after HSBC’s earnings beat expectations; the US technology company IBM announced it had agreed to purchase Red Hat, an open source software developer, for US$34bn.

Ian Copelin, Investment Director