Confidence in the UK economy has been shaken by events of recent weeks, suggests Shore Capital, and not least by the doom-laden pronouncements of Chancellor Rachel Reeves.
For the majority of taxpayers, ShoreCap expects little will change as a result of the October 2024 Budget if personal allowances and the major relevant taxes are unchanged.
Personal allowances are likely to remain unchanged for the short-to-medium term too, especially at the upper end.
Then, depending upon the time of implementation, discretionary luxury and higher category UK consumer demand, both for goods and services in the next year or two, may be negatively impeded by the Chancellor's update.
“Hence, for most British households, we return to our view that base rates are arguably a more important near-term factor conditioning ongoing discretionary spending capability.
"The bigger questions are whether or not the Budget will be a) inflationary b) slow down or speed up UK base rate cuts, c) influence sterling, d) with employment reforms imminent support the jobs market, and e) all that follows."