"This has been termed a 'cost-of-living' Budget - those with 'the broadest shoulders' are certainly bearing the brunt. The surcharge on properties valued at more than £2mn, a 2 percentage point tax increase on dividends, and restrictions to salary sacrifices in pensions will hit higher earners. Lifting the two-child benefit cap is a crucial intervention in the fight against child poverty and will be welcomed by her backbenchers, as will the £150 cut from average annual household energy bills from 2026."
"Yet, has the Budget actually helped put money in people's pockets in the short-term? Not really. The freeze on income tax and National Insurance thresholds until 2028 will drag many earners into paying higher rates of tax, and the above-inflation increase in the minimum wage could disincentivise hiring at a time of high youth unemployment and economic activity. Movement towards fiscal stability was unclear. The financial markets appear content, increased tax revenues by £26bn has given the Chancellor a more comfortable fiscal headroom of £20bn,"
The Budget aims to prioritise long-term investment, financial stability, and reassurance for markets while being framed as a cost-of-living package that shifts burdens toward wealthier households. Measures include a surcharge on properties over £2mn, a 2 percentage point dividend tax increase, and restrictions to pension salary sacrifices, alongside lifting the two-child benefit cap and a £150 average annual household energy bill cut from 2026. Short-term gains for most households are limited due to frozen income tax and National Insurance thresholds until 2028 and an above-inflation minimum wage rise that may affect hiring. Fiscal outlook remains uncertain despite increased tax revenues and market calm.
Read at London Business News | Londonlovesbusiness.com
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