What does the Budget mean for the economy?
Reflecting back on the Budget, Mortgage Introducer identified what industry figures thought were the quintessential points to the economy.
Keith Wade, chief economist at Schroders believes that the Budget featured short-term support for the economy with relation to the Coronavirus, and that it also went beyond market expectations in terms of stimulus.
Wade points to the £30bn boost that was announced, which he said is worth “1.4% of Gross Domestic Product and compares with pre-Budget expectations of 0.6% to 1%.”
With the government borrowing costs at close to record lows, this adds an incentive to borrow, which Wade said, “will be welcome in 2020, which looks set to be a difficult year for growth.”
Wade added: “Nonetheless, in an economy which is close to, if not at full employment, questions will be asked about where the extra workers will come from to staff the hospitals, build the roads, housing, and infrastructure promised in today’s statement.
“Alongside the Bank of England’s cut in interest rates earlier today the UK has just received a shot in the arm which should inoculate the economy against the virus and beyond.”
Graham Toy, chief executive of the National Association of Commercial Finance Brokers believes that ensuring SMEs are properly funded is a vital part of any healthy economy.
Toy said: “It is a shame that it has taken a pandemic to prompt such measures from the government, but we support them all the same.”
He also stresses the importance that brokers and lenders engage with these new incentives and initiatives.
Toy said that the government’s promises must be upheld and members of NACFB will have a role to play in ensuring they are held to account.
He concluded: “We welcome major reductions in business rates, the £3,000 SME grants, £1bn of working capital loans, and coronavirus related sick pay covered for small businesses.”
“The UK’s largest network of trusted broker advisers remains ‘oven-ready’ and waiting, so that when a SME makes a decision to seek finance they are doing so in a positive manner – investing proactively in their vision as opposed to seeking to plug funding gaps to merely stay afloat.”