Attached is an economic report written by Roger Martin-Fagg & distributed in association with Sourcing City. We have known Roger for numerous years & have regularly used the information in his reports to aid our own business planning decisions. We thought it may be useful to share his thoughts with you.
| Roger Martin-Fagg’s Budget Assessment:
No bull, straightforward analysis, sensible choices, it will knock about 0.1% off the growth rate, but should give business a longer sight line and therefore bring forward some investment spend. Many UK companies are cash rich and the profits from investment will be taxed at only 24% in 2015. The NIC exempt for three years plan for businesses employing fewer than 10 outside London should be welcomed. And the small companies tax rate at 25% benefits around 850,000 SME’s. I said in my last update that long run interest rates will go to 5% by year end. Wrong! The highest will be 4.5%, and given the UK is seen as safer than much of Europe now, we may only see 4.2%. ‘Boy George’ at the Bank of England performed much better than I expected, and his speech at the Mansion House last week was also clear and served notice on the Banks. The coalition has made a very good start in my view. Finally you will hear Balls et al banging on about how Government should not cut back in a fragile economy. Maynard Keynes (1932) said Government should increase its deficit in a recession, and that this spending would speed up the recovery. This was true at a time when the economy was 75% private sector and only 25% public sector. It is not true when the split is 50/50. Under these circumstances a cut in Government spend opens up more space for the private sector to grow. This budget should help create the basis for growth. | A free complimentary copy of Roger’s full report can be found on the ‘more info’ button link.

Published on: March 23rd, 2011