Budget 2015: Lack of giveaways welcomed by markets

THE Chancellor’s renewed pledge to pay down Britain’s £90.2 billion public deficit and a lack of pre-election “giveaways” has been welcomed by financial markets.

George Osborne leaves 11 Downing Street in London. Picture: Getty

After George Osborne’s speech, the FTSE 100 index of blue-chip shares ended 107.59 points higher, at 6,945.2.

Jeremy Batstone, market strategist at broker Charles Stanley, said: “There are no outright losers from this Budget, nobody is complaining furiously just weeks before an election. But it leaves us with the sense of being slightly under-whelmed.

“The stock market likes the idea that there’s continuing austerity baked into the first half of the next parliament, even though Osborne suggested the austerity may then ease.

“That is preferable to a give-away Budget. Elsewhere, even though the banks were hit by a rise in the banking levy, they expected that.”

However, the British Bankers’ Association said the hike in the levy, which aims to raise an extra £900 million a year, could fuel the tendency for banks to move more jobs offshore.

Chief executive Anthony Browne said: “The bank levy imposes a significant cost on banking businesses in the UK, which is making many banks move work and jobs to other parts of the world, and is deterring international banks from investing in the UK. This major increase in the bank levy is likely to accelerate that process.”

David Buik, markets guru at Panmure Gordon, said: “The commitment to austerity was key for the City. If there had been any rowback, gilts would have fallen out of bed and they did not; sterling also remained static on the forex markets.”

Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said: “Although the Chancellor had previously stated ‘no gimmicks, no giveaways’, there were some concessions in order to help the savings and first-time buyer areas, to the extent that the overall theme was engineered to be something of a vote winner as largely expected.”

John Longworth, director- general of the British Chambers of Commerce, said: “The Chancellor avoided the temptation to use new-found windfalls for gimmicks. His focus on fiscal responsibility will play well with business audiences.”

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