@Kirsty O'Connor / Treasury (via Wikimedia Commons).
Rachel Reeves, Chancellor of the Exchequer, delivered her first budget of the new Labour government that swept to power earlier this year on a promise of national renewal and heavy investment in infrastructure.
The budget will be watched closely by investment teams at insurers as the government has promised huge scale investment on clean energy and infrastructure as well as trying to shore up economic growth over the next several years.
"Labour have effectively thrown the kitchen sink at this budget, with tax rises and a huge increase in borrowing, in an attempt reset the fiscal framework and clear the pathway for growth regeneration over the coming years," said Neil Mehta, Portfolio Manager at RBC BlueBay Asset Management. "Given manifesto promises, it was clear the burden would lie primarily on businesses, now confirmed with the increase in national insurance contributions and minimum wages. This could be a risk to near-term business confidence and behaviour on employment."
In her presentation Reeves said there will be changes to how debt is measured and also a change to fiscal rules, which will now be set around the Public Sector Net Financial Liabilities (PSNFL) system. This will allow the government a further £15.7 billion to use rather than the £50 billion that had been forecast.
