Chancellor George Osborne said the spending review set out a long term economic plan for to fix the public finances, return the country to surplus and run a healthy economy that starts to pay down its debt. What did it provide for investors?
Nick Peters, portfolio manager at Fidelity Solutions, said: “I am confident the conditions are right for the economy to continue its modest expansion throughout 2016, and continue to believe that there are selective opportunities within UK equities.
“Wage growth has turned positive, driven by rising employment and increases in the minimum wage. This is particularly important and should help to drive a broad based feel good factor, which has been missing in the wake of the crisis. Banks should also be able to put the 2008 legacy behind, particularly as the regulatory burden subsides and the policy environment becomes more supportive. At the same time, the eurozone should continue to recover, helping to deliver increased demand in the UK’s biggest export market.
“UK equity investors can choose between the more domestically focused FTSE 250 or the more globally exposed FTSE 100.”
Richard Stone, chief executive of the Share Centre said the review contained little of direct impact for investors with no new measures on pensions or other savings schemes.
“The Autumn Statement was a highly political affair with a U-turn on tax credit changes and the police budget being protected as compared to the potential cuts trailed in advance.
“For investors there was an absence of any new announcements, with no further update on the consultation on pensions and the tax treatment of contributions and withdrawals. The Government will respond to that consultation in the 2016 budget. Following the large increase in the ISA allowance last year and low inflation, it is unsurprising that the allowances will be held flat in 2016/17.
“In summary, investors in UK plc should be cheered by the stronger performance of the economy, with a recent ONS report suggesting 30 per cent of the share capital of AIM quoted businesses which are predominantly UK based are owned by UK personal investors. If looking for specific investment ideas they should focus on those sectors where the Government will be seeking to boost growth by increasing spending.”
David Glick, chief executive of Edge Investments, said the creative economy faced a constant battle for funding and support, despite the sector accounting for 10 per cent of the economy and employing 2.6m people.
“Private investors should see these spending cuts as an opportunity to support the UK’s creative industries, to plug the growing funding gap and to realise potentially excellent investment returns in some truly outstanding creative enterprises. There are nearly 160,000 creative industries businesses in Britain, characterised by a high degree of entrepreneurial fair yet, despite this being a high growth sector, many of them still find it difficult to attract adequate capital to maximise their potential,” he said.
Meanwhile Jason Hollands, managing director of communications for Tilney Bestinvest, said with the exception of a tighter timetable for settling capital gains tax bills on the disposal of residential property assets, the Autumn Statement had little in to excite financial services commentators, which was not a bad thing.
“Isa and Junior Isa allowances, which are subject to annual adjustments, will remain unchanged next year, reflecting the evaporation of inflation. There was no news on the size of the long promised ISA for holding peer-to-peer loans, to be known as the Innovative Finance Isa, which seems subject to perpetual consultation.
“A tiny further tweak to the rules governing tax-advantaged venture capital schemes – excluding all energy generation activities – is just a catch all exclusion, tidying up any activity in this space not already caught by previous amendments and means little in practice.
Danny Cox, financial planner for Bristol-based Hargreaves Lansdown, said: “Extending qualifying Isa investments to debt crowdfunding but holding back on equity crowdfunding is a sensible move. Debt securities have much better investor protection than equity.
“In principle both equity and debt based crowdfunding could be potentially a large market benefiting investors and UK plc. Crowdfunding projects range hugely to the extent that only those which offer genuine investment as either debt or equity should be described as such.”
