Budget 2024: Key Points

Budget 2024: Key Points

After months of speculation, Chancellor Rachel Reeves’ budget speech to the House of Commons yesterday afternoon has offered advisers, investors, and financial analysts plenty to digest.

Rolling out Labour's slogans in her opening address, and mantra of “invest, invest, invest,” the Chancellor laid out a roadmap focused on driving economic growth while safeguarding stability, a delicate balance that the government is striving to achieve amid rising fiscal pressures.

Much of the budget’s trajectory had been anticipated, with several headline policies widely trailed in advance. Central to Reeves’ plan is the ambitious challenge of finding £40 billion to bolster public services and support economic growth, a huge number that underscores the scale of the nation’s fiscal gap.

With a manifesto pledge not to raise taxes on working people, the Chancellor's options for generating revenue were limited, yet she reaffirmed her commitment to raising the minimum wage, as previewed in her statements last night.

Reeves announced a shift in debt rules to facilitate government borrowing for capital projects such as infrastructure, effectively creating more borrowing headroom while staying within her self-imposed fiscal constraints. Alongside this, significant tax reforms are expected to raise substantial revenue.

The increase in employer National Insurance Contributions, projected to bring in a substantial £25 billion, as well as changes to Capital Gains Tax and Inheritance Tax, will form the backbone of funding for major spending initiatives, including additional NHS funding, an expanded teaching workforce, and upgraded school facilities.

This budget signals a bold approach from the Chancellor and sets a distinct agenda for the current government, with implications for policy and markets alike that will likely shape the economic landscape for years to come.

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