Please see below commentary received from AJ Bell this morning which highlights key points for investors on the Chancellor’s spending review.
After postponing the Budget earlier this year, and with public sector borrowing at a peacetime high, Chancellor Rishi Sunak’s spending review was keenly awaited.
While the health emergency is not yet over, despite over £280 billion of spending on health and employment measures, ‘the economic emergency has just begun’ according to the Chancellor.
UK output is expected to shrink by 11% this year, the most in history, with next year forecast to see a rebound of 5.5%, and by 2025 the economy will be 3% smaller than estimated pre-pandemic.
Sunak promised another £18 billion to help the NHS fight the virus, along with £30 billion in extended furlough payments, restart programmes, local council grants and rail subsidies, to help firms in hospitality, staffing and travel.
Also, as part of a ‘once-in-a-generation’ £100 billion infrastructure plan, there is a big increase in spending on public services, building new schools and hospitals, hiring more nurses, recruiting more police officers and building more prisons, which will benefit the outsourcing sector.
Spending on roads and other transport schemes to ‘level up’ the regions is good news for infrastructure firms, while on top of Help to Buy, which is estimated to be worth £12 billion, there is a new £7 billion national housebuilding scheme and planning regulations will be eased, all of which will be music to the ears of the housebuilders.
The UK economy requires continuous support from Government in order to recover from the effects of the pandemic. Please check in again with us soon for further interesting and relevant content based on world-wide events.