Summary
The UK government's recent Budget does not change the growth forecast for the next five years, according to the Office for Budget Responsibility (OBR). Businesses are concerned about rising costs despite some relief measures, and question where future growth will come from. Some tax incentives are introduced to encourage investment in young companies, but overall growth expectations are lowered for years after 2023.
Key Facts
- The Office for Budget Responsibility (OBR) says the Budget will not improve growth forecasts for the next five years.
- The OBR increased its growth forecast only for this year, but lowered forecasts for each year until 2030.
- Businesses did not face a repeat of a previous £25 billion national insurance increase, but meaningful growth-boosting measures are lacking.
- High Street retailers and hospitality sectors are receiving some special help, but many will still see business costs rise.
- An 8.5% pay rise for young workers may discourage employers from hiring.
- A cap on salary sacrifice arrangements could reduce future pension contributions and pay increases.
- New tax incentives aim to support investors in young companies, which received some positive feedback from the OBR.
- The Treasury states that the UK economy is already doing better than expected and emphasizes plans for capital spending and private investment to fuel growth.
