The Chancellor George Osborne will deliver his Autumn Statement at lunchtime today.
This scaled-down version of the Pre-Budget Report is unlikely to be the low-key affair Osborne had originally planned.
With the UK economic outlook becoming increasingly bleak, Osborne will need to deliver decisive growth measures without giving the impression to markets that he has departed from his ‘Plan A’.
Our Live Blog will be updated throughout the day with news and analysis from the Autumn Statement, with a particular focus on any implications for personal financial planning.
08:14 – The Telegraph is reporting that the Chancellor will use his Autumn Statement to outline spending of £650m to fund free “early education” for two year olds. This would cover around 40% of two year old children and help mothers return to part-time work.
09:11 – The Chancellor is going to have his work cut out for him today convincing the public that his plans for growth can work. Yesterday we saw revised figures from the influential Organisation for Economic Co-operation and Development (OECD) saying Britain is on the verge of recession and needs to consider making changes to its deficit reduction plans.
The OECD forecast is for the UK economy to shrink by 0.025% in Q4 2011 and then by a further 0.15% in Q1 2012, before returning to growth. Whilst a very modest predicted fall in economic output, it does fit the technical description of a recession.
Losing the support of the OECD for his fiscal consolidation strategy is a blow for the Chancellor who is bound to receive some flack for this when the opposition speak following the Autumn Statement.
09:35 – The Guardian is reporting that the Chancellor will announce measures to boost investment in small businesses. The £300m package of measures includes tax breaks to stimulate investment, in addition to the already trailed credit easing measures.
The one year holiday on business rates for very small companies is expected to be extended for a further six months from October 2012. This offers 100% relief on business rates up to £6,000, and smaller rebates up to a cap of £12,000.
They also expect to see the launch of a seed enterprise investment scheme for business start-ups, offering 50% income tax relief to investors on investments up to £100,000 in a tax year. Each new business will be able to receive investment of up to £150,000.
11:38 – With so much of the Autumn Statement already leaked to the press, there is speculation now that any surprises will involve painful measures designed to restore the progress of original deficit reduction plans. Deputy Editor of The Daily Telegraph Benedict Brogan has just tweeted about reports the Speaker will rebuke George Osborne for leaking most of the Autumn Statement. One of the highlights this afternoon could be watching the Chancellor getting a major telling off!
12:14 – We are switching over to Twitter @informedbudget for the next hour. We will be back here updating the live blog once the Autumn Statement has been presented and initial reaction has been digested.
13:27 – As Ed Balls finishes his response to the Autumn Statement, here is a quick summary of some of the key personal finance measures:
-There will be a 1% cap on public sector pay rises for two years once the current pay freeze comes to an end next year.
-The State pension age will rise from age 66 to age 67 in 2026, earlier than previously planned.
-Working-age benefits and the State pension will increase in line with CPI at 5.2% from April 2012.
-The banking levy will be increased in January 2012. Share in banking groups have already fallen on this news.
-Rate relief for small businesses is being extended for a year, until April 2013.
-Regulated rail fares will rise by 1% above inflation, rather than 3% above inflation.
-A mortgage indemnity scheme will help up to 100,000 families buy a property.
-The planned 3p fuel duty rise planned for January 2012 has been scrapped. It will rise by 3p in August 2012.
-The basic State pension will increase by £5.30 in April 2012, to £107.45 per week.
-50% income tax on Enterprise Investment Scheme investments up to £100,000 will provide investment for small businesses.
15:01 – Our free 10-page briefing note is now available to download here.
Photo credit: Flickr/The Prime Minister’s Office
