30 October 2018
By John Husselbee, Co-Fund Manager HC Verbatim Portfolio Growth Funds
Bringing forward this year’s Budget statement to two days before Halloween was a headline writer’s dream, with plenty of trick or treat themed stories in the press this morning.
Setting aside my pumpkin carving to digest the Chancellor’s speech last night, my main takeaway was that this is clearly a Budget concocted by a spooked government. With Brexit lurking ghoulishly in the background, Philip Hammond has little room for manoeuvre and has already admitted that if our exit from the EU does not go as the government wants, we can basically rip up this Budget and start again.
Looking at yesterday’s announcement, the government is giving more than it is taking away but the fact it remains in such a weakened state has clearly forced its hand: a stronger majority would allow far more radical policy although there are clear attempts to create growth via taxation.
While this Budget failed to move me to any great extent, it also failed to move markets currently dominated by far greater economic concerns – including trade wars, European politics and a liquidity drain as central banks start on the path towards normalisation. As we have continued to stress, despite the reams of press surrounding UK-centric events such as Brexit and yesterday’s Budget, there are currently much bigger events driving the fortunes of a properly diversified portfolio.
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