Columbia Threadneedle: Britain's big Budget - will it work?

Key Takeaways

• Although the budget was well trailed, the scale of the announced fiscal changes came as quite a surprise, with more than 70 policy notices
• The Labour chancellor announced such an increase in taxes and borrowing, in order to fund public spending, that the gilt market sold off, despite a favourable initial reaction
• The chancellor highlighted the £22 billion black hole in the public finances, but didn’t mention a potential £100 billion health and disability benefits bill, highlighted by the IFS, which could be this government’s biggest challenge
• Fears around tax rises had seen business and consumer confidence wane in the run up to the election, and they have been realised. But the decision to hold corporation tax could see businesses respond by boosting productivity – we hope

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