What Else Do You Need to Know for 2023 – An Assessment of the Wider Economic Outlook for the New Year
Over the past month, the Fintuity team have been serialising the Chancellor’s Autumn Statement and analysing what this means for you, your loved ones and your finances.
In our final piece, we will assess the wider economic impacts of the change in policy direction following the collapse of the Truss administration. In the last of our series of statement briefs, we will assess the wider economic outlook, government spending and social policy impacts.
The Wider Economic Outlook – 2023 Looks Set to be a Tough Year
- According to the Office for Budget Responsibility (OBR), the UK is in recession which means that the economy has slowed for two quarters in a row
- The UK’s inflation rate is predicted to be 9.1% this year and 7.4% in 2023
- The OBR predicts growth for this year at an overall rate of 4.2%, but the total size of the economy is expected to by 1.4% in 2023
- Optimistic growth rates of 1.3%, 2.6% and 2.7% have been predicted for 2024, 2025 and 2026
- Unemployment is expected to rise from 3.6% to 4.9% in 2024
- The Government has pledged itself a five-year period to hit debt and spending targets as opposed to three years currently
Government Spending Stalls
- All scheduled public spending programmes will be kept until 2025 – thereafter growth will be expected to be slower than previously expected
- The NHS budget for England will increase by £3.3bn a year for the next two years
- Defence spending will be supported at the NATO target of 2% of national income
- Government spending on schools will rise by some £2.3bn for the next two years
- There will be larger payments to devolved administrations in Scotland, Wales, and Northern Ireland
- Overseas aid spending will be kept at 0.5% for the next five years
What Else do you Need to Know?
- All social housing rental increases in England will be capped at 7% from next April as opposed to the proposed 11% inflationary figure
- The lifetime cap on social care costs in England that were due in October 2023 will be delayed by two years
- From April 2025 all electric cars, vans and motorcycles will have to to pay road taxes
Tax Rates Until April 2023 – An Overview
The tax thresholds will remain unchanged between now and April of next year and will remain as they currently stand.
- Personal allowance – Up to £12,570 Tax – 0 per cent
- Basic rate – £12,571 to £50,270. Tax – 20 per cent
- Higher rate – £50,271 to £150,000. Tax – 40 per cent
- Additional rate – over £150,000. Tax – 45 per cent
Fintuity – Your Financial Partner in a Time of Crisis
Information is key to overcoming a crisis and Fintuity is able to assist you in a number of ways by helping you plan for your financial future.
As the cost-of-living crisis continues to increase, we can assist you in a number of ways including a cutting-edge Virtual Adviser, a library of up-to-date financial advice, a complimentary IFA meeting as well as a searchable blog with hundreds of articles and a complimentary financial health check to allow you to maximise your finances. The Fintuity team can help supporting you with advice on:
- General financial and budgeting advice
- Cost of living workshops
The best place to start however is with a financial health check to allow us to work out how best to help you. Knowledge is power – receive your complimentary financial report with our Virtual Adviser or Book your Initial Consultation today to speak to a member of our team.
Introducing Fintuity – The UK’s Digital IFA!
Fintuity is like a traditional IFA, only we are an online adviser which means we can offer a more cost effective, time-sensitive and flexible service! We offer the full range of IFA services via our digital platform, at below industry rates and at your convenience. Please do not hesitate to get in touch to see how we can help you.
Please Note: All information included in this article were correct at the time of publishing.