Budget, FTSE & the coronavirus outbreak: the week in news

Budget, FTSE & the coronavirus outbreak: the week in news

All eyes were on the chancellor’s red box this week as the long-awaited Budget was announced against a backdrop of falling markets and a growing coronavirus crisis.

Meanwhile, it appears the famous former-star fund manager Neil Woodford is looking to make a comeback and the compensation scheme hit a roadblock. It’s time for the week in news.

1 Budget digest

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New chancellor Rishi Sunak delivered his debut Budget this week — the first since October 2018 and in challenging circumstances.

He announced a £30bn war-chest to provide a bridge for businesses and households to make sure the temporary coronavirus did not cause permanent economic strain, including a £5bn emergency response fund and a £2bn cash infection for small businesses.

With NHS staff in the spotlight now more than ever, the chancellor also unveiled plans to raise the point at which tapering of the annual allowance kicks in from £110,000 to £200,000 as of next month.

Other changes included reducing the lifetime limit for entrepreneurs’ relief from £10m to £1m, cracking down on tax avoidance, a probe into the quality of tax advice, a review of fund management fees and a doubling of the Junior Isa limit.

2 Falling FTSE

UK shares had their biggest daily fall in more than 30 years this week as the FTSE 100 index dropped by nearly 11 per cent yesterday (March 12) following the news of travel bans and lockdowns to curb the coronavirus.

Stock markets have been dropping across the globe since the coronavirus started to become a major issue at the start of the year. Since January 1, the FTSE 100 and the Euro Stoxx 600 have seen a third wiped from their share price while the S&P 500 is down 15 per cent.

Companies' share prices have tumbled as the coronavirus caused the US to introduce a travel ban to most of Europe while Italy and Ireland are in lockdown.

3 Containing the panic

So what are advisers telling clients as markets plummet? Primarily, do not panic and do not sell.

Alan Steel, chairman of Alan Steel Asset Management in Linlithgow, told FTAdviser he reassures his clients not to panic.

Similarly Philip Milton, who acts as both a financial adviser and a discretionary fund manager at PJ Milton and Co in Devon, emailed all of his clients, asking them if they could defer withdrawing money "to ensure they do not take funds at a dangerous moment".

4 Woodford’s comeback plans

Neil Woodford is in the early stages of forming a consortium to invest in unquoted companies, FTAdviser reported this week.

Since he began winding down Woodford Investment Management in 2019, the former-star fund manager has been meeting with a range of former associates and contacts in the City. 

Some of the meetings were informal catch-ups, but evolved into a small group of investors discussing the possibility of buying the portfolio of unquoted and illiquid assets currently held by the Woodford Equity Income fund — a move that would see cash returned to stranded investors more quickly.