UK autumn statement: Taxpayers to be hit hard in 2023-24

Fiscal tightening will not change UK economic outlook

SUMMARY

The autumn statement delivered by UK Chancellor Jeremy Hunt will hurt all taxpayers, with the government looking for additional revenues to fill the fiscal hole. But the fiscal tightening will not change the country's economic outlook.


This is about broadening the tax base, spreading the pain far and wide. £55bn of tax increases and spending cuts will materialise in 2024 and after the next election in late 2025.

Public spending will also decline in real terms since outlays are expected to increase by only 1% in nominal terms.

Much of the fiscal tightening exercise is backloaded, with the freeze in thresholds happening from April next year and continuing into the following year, by which time the government hopes that the economy will be recovering enough to improve the conservative party’s chances for the next parliamentary elections to be held before January 2025.

If the package helps to lower inflation by lowering demand and stabilizing government debt, it will at the margin reduce the amount of interest rate hikes that the Bank of England (BoE) will likely need to deliver in the final few months of 2022 and the start of 2023.

Markets have barely reacted to the news, suggesting that there were very few surprises and the effort to rebuild credibility continues, allowing investors to focus on long-term fundamentals of the UK economy and the prospect of a credible path towards debt sustainability.

The fiscal stimulus announced by the Chancellor will lead to a deterioration for domestic UK equities, due to lower domestic demand and cost saving incentives taken by UK households.

As the UK battles through a recession the sterling should remain range bound, which should be supportive for the UK large cap equity market, given that most of UK firms generate a large part of their revenue (over 70%) overseas. However, not all UK equity markets will benefit as mid and small cap market generate most of their revenue domestically.

Insights

See our insights and the issues that matter for your wealth.

Insights

See our insights and the issues that matter for your wealth.

Contact us

To help put you in touch with the right Private Bank team, please answer the following questions.

Are you an existing client?

Please fill out the form, so we can contact you.

I consent to the use of my personal information (name, telephone number and email address) by Citi Private Bank for the purpose of contacting me to send me marketing information about Citi Private Bank's wealth management products and services. I understand that my information will be used in accordance with the relevant  privacy statement for my location. I also understand I can withdraw this consent to be contacted by phone or email at any time by emailing donotspam@citi.com

Please consent to the terms and conditions to continue

What profile best describes you?

I would like to discuss an investment (USD) of

I would like to discuss an investment (USD) of

I would like to discuss an investment (USD) of

Thank you for your interest in Citi Private Bank.

Our services have a minimum investment level of $5 million.

Based on the information provided, we believe that a Citigold relationship may be most appropriate for your needs.

To find out more: Visit Citigold

Thank you for your interest in Citi Private Bank.

Our services have a minimum investment level of $5 million.

Based on the information provided, we believe that a Citigold relationship may be most appropriate for your needs.

To find out more: Visit Citigold

I am interested in

Aircraft Finance
Art Advisory & Finance
Banking
Custody
Family office
Investments
inerested_in
Lending
Real Estate
Trust

Please select alteast one.

I am interested in

Aircraft Finance
Art Advisory & Finance
Banking
Custody
Family office
Investments
Law Firm
Lending
Real Estate
Trust

Please select alteast one.

Job title & Company

Job title & Company

Location

Location

How would you like us to contact you?

How would you like us to contact you?

Please enter your contact details

Please enter your contact details

How did you hear about us?

How can we help you?

I consent to the use of my personal information (name, telephone number and email address) by Citi Private Bank for the purpose of contacting me to send me marketing information about Citi Private Bank's wealth management products and services. I understand that my information will be used in accordance with the relevant privacy statement for my location. I also understand I can withdraw this consent to be contacted by phone or email at any time by emailing donotspam@citi.com

Please consent to the terms and conditions to continue

How did you hear about us?

How can we help you?

I consent to the use of my personal information (name, telephone number and email address) by Citi Private Bank for the purpose of contacting me to send me marketing information about Citi Private Bank's wealth management products and services. I understand that my information will be used in accordance with the relevant privacy statement for my location. I also understand I can withdraw this consent to be contacted by phone or email at any time by emailing donotspam@citi.com

Please consent to the terms and conditions to continue

Thank you for your interest in Citi Private Bank. A member of our team will be in touch with you shortly.