THE Autumn Statement restored some much-needed market credibility but the Chancellor’s implied support for interest rate hikes spells more pain for people across the UK.
That’s the view of Nigel Green (pictured) CEO of deVere Group, one of the world’s largest independent financial advisory, asset management and fintech organisations.
Green said:
“Hunt has managed to make markets boring again – which is a win for the government.
“The idea was to restore stability following Liz Truss’s disastrous mini-budget in September when the pound hit historic lows against the dollar, gilt yields jumped, and stock markets fell due to reckless economic policies.
“The lack of major volatility of the pound and the bond market, which sets the rate at which the government can borrow money, suggests the Hunt statement has worked in bringing back some much-needed market credibility.”
But inflation remains a significant issue
Nigel Green continued that there remained questions about the Chancellor’s handle on the UK’s soaring inflation crisis, which has hit a 41-year high of 11.1%
Hunt gave his full support to the Bank of England to tackle the red-hot inflation, which implies his support for more, and probably aggressive, interest rate hikes. This at a time when the UK is nose-diving into a recession.
“Another hike can be expected to make the downturn in Britain’s consumer-driven economy worse and last for longer.
“It would mean higher borrowing costs for property owners on variable rate mortgages. Lenders will also increase the rates they charge on personal and business loans at a time when households and firms are facing a shocking cost of living crisis.
“The Bank of England’s anticipated hike would be harmful to the economy and pile on the pain for people across the country.”
“Hunt began his Autumn Statement saying the inflation problem is largely fuelled by external issues, such as rocketing energy prices, rather than by domestic ones.
“Which begs the question: why is he backing the Bank of England to continue to increase the UK’s interest rates again when they cannot tackle inflation caused by global issues?
Hunt’s fiscal discipline will please the markets, but households and businesses across the UK will be braced for yet more financial pain in the months to come.
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Automotive and fleet writer for Broker News