DAVY VIEW

Given limited room for manoeuvre in tomorrow’s Budget, Jeremy Hunt will likely focus on temporary and limited measures to help companies and households. The energy price guarantee will stay at £2,500 and fuel duty will be frozen again. Corporation taxes will rise to 25%, but some replacement for the ‘super deduction’ on machinery and equipment spend is likely. Hunt may hint that tax cuts are likely down the line once for the outlook for the public finances improve. However, borrowing of 5.8% of GDP in 2022/23 still needs to be reined in, with the bulk of November’s austerity measures made up of spending restraint after the next election.