On March 23rd, the Chancellor unveiled his Spring Statement – and coming at a time when finances are being squeezed and the cost of living is high, it was a meatier statement than may have been expected in any other year.
But what does the 2022 Spring Statement mean for investors? We take a look…
Inheritance tax and CGT
Investors can breathe a sigh of relief, as the Spring Statement revealed no changes to either inheritance tax or Capital Gains Tax. However, the wider economic picture looks significantly bleaker.
The Office for Budget Responsibility has reduced its 2022 growth forecast from 6% to 3.8%. They also state that real living standards are due their largest financial year fall on record – 2.2% – and are not expected to recover until 2024-25.
The Spring Statement included little about the housing market. However, rising inflation – which was covered – is leading to increased mortgage rates. This will mean that those looking to invest in property this year will likely face increased costs.
There is some positive news for landlords working to meet energy efficiency targets, however. Sunak announced that VAT would be scrapped on the cost of insulation, heat pumps and solar panels, giving some degree of relief to landlords for whom this work is necessary.
Interactive Investor predicts that the Spring Statement will have very little impact on UK stocks – although there may be some companies that could be affected.
They believe that the industry likely to see gains as a result of the Statement is the home renovations and building materials sector. However, they believe that only “marginal revenue benefits” are likely here.
All in all, the Spring Statement has brought little change for investors. However, with living costs rising and inflation increasing, what will the future bring?
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