Paul Thomas discusses the UK’s economic challenges, potential fiscal policies, and notable events in November, including the Chancellor’s Autumn Statement, interest rate decisions, housing market updates, and awards ceremonies.
As Liam Byrne, the Treasury’s former chief secretary, cleared out his desk following Labour’s punishing defeat in the 2010 general election, he decided to leave his successor a note.
It read, rather crassly: “Dear Chief Secretary, I’m afraid there is no money.”
Thirteen years on, very little has changed.
A pandemic, an oil price shock and the worst cost-of-living crisis in a generation have left the economy on a knife edge and public finances in a mess.
Despite borrowing coming in lower than expected in September, the Chancellor maintains he has little room to maneuver when he delivers his latest Autumn Statement on 22 November.
However, that is not to say the upcoming fiscal update will be a total non-event.
Sweeping tax cuts may be off the table, but there is speculation that ministers may be planning to take the axe to the headline rate of Inheritance Tax (IHT).
IHT, also known as the ‘Death Tax’, is by far the UK’s most hated levy, even though official figures show fewer than 4% of estates pay it.
Regardless, if Hunt decides to cut IHT – and that is a big if – there is no doubt it will go down well with voters – especially in Tory Party heartlands – with a general election on the horizon.
We can also expect to hear more about the Chancellor’s plans to boost participation in the workforce.
The UK is one of the few major economies whose labour market is smaller now than it was before the pandemic, something which is acting as a drag on economic and productivity growth.
At the Tory Party conference, Hunt promised tougher sanctions on benefit claimants who refuse to find work. It’s likely the Chancellor will flesh this out in more detail.
ISA reform is also reportedly on the agenda. Over the past two decades, the UK’s equity market has dwindled in importance and there are currently numerous consultations and reviews in motion to restore it to its former glory.
The Chancellor is convinced that boosting retail investor participation in markets is key to lifting the London Stock Exchange’s long-term prospects.
It is thought he wants to achieve that by simplifying the ISA system and even offering tax breaks for those who back UK-listed firms. Whether or not he goes that far remains to be seen.
The Autumn Statement may be November’s centerpiece, but there are still plenty of other on-diary events worthy of your attention.
All eyes will be on the Bank of England on 2 November, when its Monetary Policy Committee announces its latest interest rate decision. The Committee held rates for the first time in 15 meetings in September.
With the housing market showing signs of wobbling, observers will be keen to hear what has happened to house prices when the latest Halifax house price index is published on 6 November. Rightmove and the Office for National Statistics follow with their own indices on 7 and 17 November, respectively.
24 November is a busy day, with it being Black Friday, GfK releasing its latest UK Consumer Survey and Ofgem announcing an update to the energy price cap. The cap, introduced in 2019, is currently set at £1,923 a year for the average dual fuel household.
There is also a flurry of awards ceremonies in November, including Investment Week’s Women in Investment Awards (22 November), the Financial Advisers Service Awards and Professional Pensions Investment Awards (both 23 November).