{"id":8560,"date":"2022-10-19T10:09:59","date_gmt":"2022-10-19T09:09:59","guid":{"rendered":"https:\/\/new.contentdeployment.co.uk\/tomd\/2022\/10\/19\/news-in-review-77\/"},"modified":"2022-10-19T14:47:12","modified_gmt":"2022-10-19T13:47:12","slug":"news-in-review-77","status":"publish","type":"post","link":"https:\/\/new.contentdeployment.co.uk\/tomd\/2022\/10\/19\/news-in-review-77\/","title":{"rendered":"News in Review"},"content":{"rendered":"
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“We need to act now to reassure the markets\nof our fiscal discipline\u201d<\/em><\/strong><\/em><\/strong><\/p>\n<\/div>\n\n

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Last\nFriday, in response to the mounting political crisis over his tax-cutting Growth\nPlan, Kwasi Kwarteng arrived back earlier than scheduled from the International\nMonetary Fund (IMF) conference in Washington, and headed straight to Downing\nSteet, where the Prime Minister sacked him from the role after just 38 days.<\/strong> <\/strong><\/p>\n<\/div>\n\n

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Jeremy Hunt,\nformer Foreign Secretary and Health Secretary, who also competed for the\nConservative party leadership twice, was named as the new Chancellor. Hunt will now deliver the Medium-Term\nFiscal Plan on 31 October, alongside the Office for Budget Responsibility (OBR)\nforecast.<\/p>\n<\/div>\n\n

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Rounding off another challenging week for\nthe UK economy and the government, Liz Truss held a Downing Street press\nconference on Friday where she announced that Corporation Tax will rise from 19%\nto 25% next year, another major U-turn on the tax-cutting Growth Plan, unveiled\njust three weeks previously. Truss admitted that her radical agenda had rattled\nfinancial markets, admitting that her borrowing-fuelled plan \u201cwent further\nand faster than markets were expecting,\u201d <\/em>before adding, “we need to act now to reassure the markets of\nour fiscal discipline.\u201d<\/em><\/em><\/strong><\/p>\n<\/div>\n\n

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The government has come\nunder intense pressure to take action to reverse aspects of the Growth Plan, in\norder to alleviate market concerns.<\/p>\n<\/div>\n\n

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\u201cThe most important objective for our country right now is stability\u201d<\/em><\/strong><\/p>\n<\/div>\n\n

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The fourth Chancellor in\nas many months, Mr Hunt made an emergency statement on Monday morning in a bid\nto stabilise financial markets, before addressing the Commons later in the\nafternoon. Declaring \u201cthe most important\nobjective for our country right now is stability,\u201d<\/em> he set out his\nintentions to scrap almost all\nthe tax measures set out in the Growth Plan not yet legislated for in Parliament.\nThese include abolishing the planned reduction to the basic rate of Income Tax from 20% to 19% next April,\nabandoning the Dividend Tax rate changes, in addition to ditching the VAT-free shopping scheme for non-UK visitors. The government\nwill also not be proceeding with reversal of the off-payroll working reforms\nintroduced in 2017 and 2021, or freezing alcohol duty rates as previously\npledged.<\/em><\/strong><\/p>\n<\/div>\n\n

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He also announced a significant amendment\nto the government\u2019s energy plan, which\nwill now only run to April 2023, with a Treasury-led review introduced to determine how to support\nhouseholds and businesses thereafter.<\/p>\n<\/div>\n\n

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The planned reduction\nto Stamp Duty will proceed, as will the reversal of the 1.25 percentage point\nincrease in National Insurance contributions.<\/p>\n<\/div>\n\n

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Saying he remains confident about the UK\u2019s\nlong-term economic prospects, the new Chancellor did caution, \u201c<\/em>growth requires confidence and stability, and the United\nKingdom will always pay its way. This government will therefore make whatever\ntough decisions are necessary to do so.\u201d<\/em><\/p>\n<\/div>\n\n

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Markets<\/strong><\/p>\n<\/div>\n\n

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The Prime Minister\u2019s appearance on Friday erased any gains made following Kwarteng\u2019s dismissal, as she failed to outline a new policy direction. However, Mr Hunt\u2019s reversal of most of the mini-budget\u2019s tax cuts and announcement of spending cuts to come, saw market confidence improve with the FTSE 100\u00a0ending Tuesday\u2019s session up 0.24% at 6,936.74, and the\u00a0FTSE 250\u00a0ahead by 0.15% at 17,529.31. <\/p>\n<\/div>\n\n

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Mortgages rates at a high<\/strong><\/strong><\/p>\n<\/div>\n\n

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Average\nmortgage interest rates are the highest they have been since the 2008 financial\ncrisis, with the average rate for a two-year fixed\nrate loan at 6.53% and 6.36% for a five-year fixed deal, according to Moneyfacts.<\/p>\n<\/div>\n\n

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Countering the Cost-of-Living Crisis<\/strong><\/a><\/strong><\/p>\n<\/div>\n\n

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In its\nlatestWorld Economic Outlook entitled \u2018<\/em>Countering the Cost-of-Living Crisis<\/em><\/a>\u2019,<\/em> released last\nweek, the IMF cautioned that the combined impacts ofinflation, the war-induced food and energy crises, and dramatically higher\ninterest rates were threatening financial market stability and driving the world\nto the brink of recession. With the cost-of-living crisis \u2018tightening\nfinancial conditions in most regions\u2019,<\/em> the outlook deduced that global economic\nactivity is \u2018experiencing a broad-based and sharper-than-expected slowdown,\nwith inflation higher than seen in several decades.\u2019<\/em>  With global inflation forecast to increase\nfrom 4.7% last year to 8.8% this year, declining to 6.5% next year, the outlook\nsuggests that in order to restore price stability, monetary policy should stay\nthe course and fiscal policy should aim \u2018to alleviate the cost-of-living\npressures while maintaining a sufficiently tight stance.\u2019 <\/em><\/p>\n<\/div>\n\n

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Here to help<\/strong><\/p>\n<\/div>\n\n

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Financial\nadvice is key, so please do not hesitate to get in contact with any questions\nor concerns you may have.<\/p>\n<\/div>\n\n

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The value of investments can go down as well\nas up and you may not get back the full amount you invested. The past is not a\nguide to future performance and past performance may not necessarily be\nrepeated.<\/strong><\/strong><\/p>\n<\/div>\n\n

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All\ndetails are correct at time of writing (19 October 2022)<\/strong><\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

“We need to act now to reassure the markets of our fiscal discipline\u201d Last Friday, in response to the mounting political crisis over his tax-cutting Growth Plan, Kwasi Kwarteng arrived back earlier than scheduled from the International Monetary Fund (IMF) conference in Washington, and headed straight to Downing Steet, where the Prime Minister sacked him […]<\/p>\n","protected":false},"author":12,"featured_media":8562,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[32,112],"tags":[],"hd_content_source":[116],"_links":{"self":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/8560"}],"collection":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/comments?post=8560"}],"version-history":[{"count":2,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/8560\/revisions"}],"predecessor-version":[{"id":8835,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/8560\/revisions\/8835"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/media\/8562"}],"wp:attachment":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/media?parent=8560"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/categories?post=8560"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/tags?post=8560"},{"taxonomy":"hd_content_source","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/hd_content_source?post=8560"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}